The Next Air Cargo Crisis Isn’t Being Caused by Iran. It’s Being Caused by Our Dependence on Fragile Supply Chains.
by Peter Raven, Publisher, CargoNOW
Every time the world faces a geopolitical crisis, the logistics industry reacts with the same familiar chorus.
“Rates are rising.”
“Capacity is tightening.”
“Expect delays.”
“Prepare for disruption.”
We’ve heard it during COVID-19. We heard it when the Ever Given blocked the Suez Canal. We heard it during the Red Sea crisis. We heard it when Russia’s invasion of Ukraine reshaped global aviation routes. Now we’re hearing it again as conflict involving Iran forces airlines to avoid one of the world’s busiest aviation corridors.
Experts are predicting that global air cargo rates could jump by as much as 15%. Flights between Asia and Europe are being rerouted around Iranian airspace, adding up to four hours to journeys. Aircraft are burning more fuel, carrying less cargo, paying higher insurance premiums and passing every additional cost directly onto shippers.
None of this is surprising. The surprising part is that we continue to pretend it is.
For all the billions invested in digital transformation, artificial intelligence, predictive analytics and supply chain visibility platforms, global logistics remains astonishingly vulnerable to a single geopolitical flashpoint.
One conflict.
One stretch of closed airspace.
One disrupted trade route.
And suddenly freight markets are in turmoil.
If that doesn’t concern supply chain leaders more than the actual 15% increase in rates, they’re asking the wrong questions. The uncomfortable truth is that Iran is not the problem. Iran is simply exposing the problem. For decades, global supply chains have been designed around the assumption that transport networks will always remain open, fuel will remain affordable, insurance markets will remain stable and geopolitical tensions will remain somebody else’s problem.
That assumption no longer exists. Today’s supply chains are built for efficiency, not for uncertainty. Every kilometre removed from a transport route saves money. Every warehouse eliminated improves the balance sheet. Every reduction in inventory pleases shareholders. Until something goes wrong. Then those same efficiencies become liabilities.
When airlines divert around conflict zones, flights become longer. Longer flights require more fuel. More fuel means less payload. Less payload means less cargo capacity. Less capacity drives higher freight rates. It’s not complicated. It’s physics but every disruption catches businesses by surprise because too many organisations continue to optimise for the lowest logistics cost instead of the highest supply chain resilience. What’s particularly alarming this time is that air cargo isn’t operating in isolation.
Ocean freight is already under pressure. The Red Sea remains unstable. Shipping lines continue to reroute around the Cape of Good Hope. The Strait of Hormuz has become another potential flashpoint. Transit times remain unpredictable. When sea freight becomes unreliable, shippers naturally migrate to air freight but what happens when air freight is also constrained?
The result is exactly what we’re beginning to witness, i.e.,e. a global competition for shrinking capacity. Large multinational companies will cope. They have long-term airline agreements, strategic procurement teams, enough purchasing power to secure aircraft space and more of an ability to absorb and work through these shocks.
Smaller exporters won’t be so fortunate. For them, a 15% increase isn’t simply another cost. It could be the difference between winning and losing a customer or remaining profitable at all. What should concern business leaders isn’t that freight rates are rising. It’s that every geopolitical event now creates the same domino effect.
A missile is launched in one country.
Factories slow production on another continent.
Retailers thousands of kilometres away experience stock shortages.
Consumers pay higher prices.
That’s no longer a supply chain but rather systemic global exposure. Perhaps the greatest irony is that while the logistics industry talks endlessly about resilience, many organisations continue making procurement decisions based almost entirely on cost. Transport providers are selected because they’re cheaper. Warehouses are closed because inventory is considered waste. Suppliers are consolidated to maximise purchasing leverage. Every decision makes perfect financial sense, until disruption arrives. When disruption arrives, suddenly everyone starts talking about resilience.
Resilience isn’t something you buy during a crisis. It’s something you invest in long before the crisis begins. The companies that emerge strongest from this latest disruption won’t necessarily be those paying the lowest freight rates. They’ll be the organisations that diversified suppliers before they had to and the ones that accepted carrying slightly more inventory.
The Iran conflict may eventually stabilise and airspace will reopen and freight rates will settle. The headlines will disappear but another geopolitical crisis will come, and my suspicion is that five years from now, we’ll still be writing the exact same articles after the next crisis wondering why global supply chains once again proved so fragile.
