Air Cargo Rate Growth Slows as Middle East Capacity Rebuilds

The sharp rise in global air cargo rates tied to the Iran conflict is beginning to ease, as a fragile ceasefire allows capacity to gradually return to the market.

According to data from WorldACD Market Data, average worldwide spot rates increased just one percent week over week in week 16 (April 13–19), reaching $3.73 per kilogram. That marks a slowdown compared to earlier weeks, though rates remain 46 percent higher year over year and more than 40 percent above late-February levels when the conflict began.

The modest weekly increase, the smallest since the start of the war, was driven primarily by Asia Pacific lanes, where rates rose three percent to $5.14 per kilogram. In contrast, rates from the Middle East and South Asia (MESA) region declined two percent week over week to $4.74 per kilogram, despite remaining significantly elevated compared to last year.

Capacity gradually returns to MESA

With the ceasefire in place since April 8, some stability is returning to regional air cargo operations. Capacity from MESA origins rose about seven percent week over week in week 16, narrowing the shortfall versus pre-war levels from minus 35 percent to minus 30 percent.

The recovery has been led by Gulf markets, where the capacity deficit improved from minus 53 percent to minus 46 percent, alongside gains in the Levant. South Asia capacity has nearly returned to pre-conflict levels, down just four percent, broadly in line with the global capacity gap of six percent.

Globally, overall capacity was flat week over week, as gains in freighter activity were offset by reduced bellyhold space linked to industrial action in Germany and flight disruptions tied to fuel shortages and rising costs.

MESA volumes decline despite added capacity

Despite the return of capacity, cargo volumes from MESA origins fell six percent week over week, contributing to the region’s decline in spot rates.

Shipments from MESA to Europe dropped three percent, with declines from India and Sri Lanka outweighing gains from Dubai. Rates on this lane fell five percent week over week but remain 82 percent higher than a year ago.

On MESA to U.S. routes, chargeable weight slipped one percent, as reduced volumes from South Asia were nearly offset by increases from Dubai. Spot rates declined four percent week over week but are still up 64 percent year over year.

Global volumes rebound after Easter

Worldwide cargo volumes increased three percent week over week in week 16, supported by post-holiday demand recovery. Europe led the rebound with an 11 percent increase, followed by Central and South America at nine percent and North America at three percent.

Elsewhere, volumes declined from MESA and Africa, both impacted by ongoing disruptions tied to the Iran conflict.

Asia Pacific trends were mixed. Rates to Europe rose slightly, up one percent week over week, even as volumes fell three percent. On transpacific routes, rates held steady overall, with increases from Northeast Asia offset by declines from Southeast Asia, while volumes edged up one percent.

Overall, the latest data suggests the market is stabilizing after several weeks of disruption, with easing rate pressure as capacity returns, though conditions remain volatile.