Air cargo rates climbed 36% year on year in May

Moody’s Ratings ⁠cut its global airline sector outlook to negative from stable, saying fuel costs tied to the Iran war and disruption around the Strait of Hormuz would “materially reduce” operating profit this ​year. It said profits could fall by more than 35% in 2026 before recovering next year.

Air cargo rates climbed 36% year on year in May as conflict in the Middle East continued to disrupt global supply chains, according to data provider WorldACD.

While air cargo demand has remained resilient, the disruption has pushed rates higher, as airlines reroute aircraft, redistribute capacity and force supply chains to adjust to changing network conditions.

WorldACD reported that inbound cargo volumes to the Gulf, which fell by around 60% immediately after the conflict escalated, had returned to year-earlier levels during May.

The effect on pricing has been particularly pronounced on certain tradelanes. WorldACD highlighted Amsterdam-Dubai, Hong Kong-Riyadh and Mumbai-London as examples of where rates have risen dramatically since the start of the year. On some routes, rates have nearly doubled, while Amsterdam-Dubai recorded increases approaching 200%.

Despite the market turbulence, WorldACD’s latest forecast points to continued growth for the sector. The company expects global air cargo demand to increase 2.3% this year, although it acknowledged that the continuing geopolitical uncertainty could alter the outlook.

Sources: reuters.com, theloadstar.com