Cargo capacity collapses amid airspace closure and cancelled flights

Airfreight is among the sectors hardest-hit by the Iran conflict as airspace closes across the Gulf, disrupting global trade. 

Since the conflict began on Saturday, around 3,000 flights have been cancelled, according to aviation data specialist Cirium, and that number is quickly climbing.  

Yesterday, airspace over 10 countries remained at least partially closed – Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Qatar, Saudi Arabia, Syria, and the UAE.

For air cargo, the implications are immediate and severe.

Insurance firm Otonomi noted that global air cargo capacity had dropped some 18% as major Middle Eastern and international carriers suspended operations across the region.

Emirates SkyCargo, Qatar Airways Cargo, Etihad, Cathay Pacific, IAG Cargo, and KLM are among those halting services either to or through the affected airspace, and Flexport estimated that Middle East carriers accounted for around 13% of global air cargo capacity, meaning their grounding is already constraining the wider network. 

All EU and US carriers have suspended operations into the Middle East and Near East, effectively cutting off the region from global markets. 

Flexport also indicated that multiple major carriers had invoked force majeure, citing the airspace closure and safety risks, with standard SLAs and transit time guarantees suspended. 

Cathay Pacific confirmed it had temporarily suspended all flights to and from Dubai and Riyadh through 14 March and Qatar Airways said its flight operations remained temporarily suspended due to the closure of Qatari airspace. An update is expected by 9am Doha time tomorrow. 

These suspensions remove some of the world’s most important long-haul cargo connections linking Asia, Europe, Africa, and the Americas, and the impact is being felt far beyond the Middle East. 

The Indian Subcontinent and South-east Asia are among the most exposed regions, given their heavy reliance on Gulf hubs for connectivity into Europe and beyond. With those hubs offline, shipments are either stranded, rerouted on longer sectors, or competing for scarce capacity on alternative carriers. 

The removal of Middle Eastern lift, combined with the fuel-intensive rerouting required by European and Asian airlines skirting closed airspace, is significantly reducing effective global capacity. 

Flexport noted that forwarders were already warning of an immediate and sharp surge in spot rates, particularly on Far East lanes. Severe backlogs are building as cargo is rolled or awaiting reallocation. 

Ground handling agents report forwarders are being required to collect cargo already delivered to EU gateways and reassign it to alternative carriers. This is pushing up rates even on traditionally lower-yield Far East–Europe lanes, according to Flexport.  

It said: “GHA storage capacity is at its limit, with particular pressure on temperature-controlled and perishables cargo. Shippers with time- or temperature-sensitive freight should treat this as urgent.” 

There is no confirmed timeline for the reopening of key airspace, thus any cargo originating from, destined for, or transiting through the Middle East is subject to long delays. 

Even once the airspace reopens, the backlog and network imbalances are likely to take days, if not weeks, to unwind.