The escalating tensions in the Middle East are causing disruptions in the Asia-to-Europe airfreight routes, leading to potential bottlenecks and price increases. Iran’s recent launch of missiles and drones at Israel has resulted in major carriers avoiding Iranian airspace, impacting the Asia-to-Europe trade. With Russian airspace also closed, carriers are limited to alternative routes through Turkey or Egypt and Saudi Arabia. The closure of key airspace could further bottleneck airfreight routes.
In addition, the drone attack has prompted carriers to suspend flights to Israel, and an MSC ship with ties to Israel was seized by Iran in the strategically important Strait of Hormuz. The potential high-risk designation of this area could cut off access to key sea-air transit hubs like Jebel Ali port in Dubai. This disruption could lead to a shift in sea-air shipments to other hubs like Colombo or Bangkok, which are already overwhelmed with diverted Red Sea tonnage.
While an outright closure of the Strait of Hormuz is deemed unlikely, geopolitical tensions are expected to drive up costs for sea-air shipments from Dubai. Shippers are advised to conduct their own risk evaluations and navigate the complex political landscape affecting commercial shipping. The situation highlights the unfortunate intertwining of commercial shipping with politics, making it a challenging environment for businesses to navigate.
