Anabelle Colaco
12 Apr 2026, 04:01 GMT+10
LOS ANGELES/MONTREAL: Global supply chains are being reshaped as companies search for alternative shipping routes to bypass disruptions in the Middle East, with soaring air freight costs and congested sea lanes forcing firms to rethink how goods move between Asia and Europe.
Shippers are increasingly experimenting with unconventional routes, including sending cargo through the United States, as the impact of the Iran conflict continues to disrupt traditional pathways despite a recent ceasefire.
Some companies that once transported electronics and other high-demand goods through Middle Eastern hubs are now routing shipments via Los Angeles, combining ocean and air transport to manage costs, according to freight forwarders.
"It's a lot faster than going by ocean around (the southern tip of Africa), but much, much cheaper than doing air direct," said Ryan Petersen, chief executive of Flexport.
Air cargo rates have surged as demand rises and jet fuel prices climb, driven in part by Iran's continued blockage of the Strait of Hormuz, a key global shipping corridor.
Data from WorldACD Market Data shows air cargo capacity to the Middle East has dropped by more than 50 percent year-on-year over the past two weeks.
At the same time, long-term air freight rates from Vietnam to Europe have nearly doubled to US$6.27 per kilogram compared with pre-war levels, according to Flexport.
By contrast, rates for shipments from Los Angeles to Paris have risen by just 8 percent, helped by increased passenger flights that provide additional cargo space.
"We could see a bump if trade disruptions persist in the Middle East," said Noel Hacegaba, chief executive of the Port of Long Beach, part of the largest U.S. port complex in Los Angeles.
The disruptions have also hit global air cargo capacity more broadly.
Capacity, which was expected to grow by 5.5 percent this year, has instead declined by 1 percent so far due to the conflict, said Marco Bloemen, managing director of consulting firm Aevean.
Recovery will depend on the return of Arab carriers' widebody passenger aircraft, which account for roughly half of the region's air freight capacity, he said. "Arab carriers such as Emirates and Qatar Airways operate some of the world's most important air freight networks," said Niall van de Wouw, chief air freight officer at Xeneta.
A slower rebound in tourism to the Gulf could further limit passenger flights and reduce available cargo space, he added.
Airlines are already adjusting operations. British Airways said it would cut flights to the Middle East when services resume, signaling that regional tensions could weigh on demand.
Cargo operators are also adapting. Companies such as UPS continue to operate in the region using contingency plans while avoiding key hubs such as Dubai.
Third-party charter aircraft have stepped in to cover some routes, but jet fuel supplies are expected to remain tight and expensive for months. "The major issue for everyone is the massive hike in fuel prices," said Dan Morgan-Evans, group cargo director at Air Charter Service.
Higher costs are already being felt across supply chains. One client of AIT Worldwide Logistics paid five to six times more to move oil drilling equipment to Saudi Arabia by air and truck after its planned ocean shipment from Houston was canceled, said Ryan Carter, the company's Americas executive vice president.
Despite the costs, many companies have little choice but to keep goods moving. "Sometimes the cargo just has to move," Morgan-Evans said.
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