Long-term contract rates businesses pay to move air freight are expected to rise 5% to 15% this year, instead of retreating, because the resumption of hostilities between Iran and the United States is once again reducing airline capacity through the critical Middle East…
rridor, freight analytics firm Xeneta said in a market outlook published on Friday. Xeneta’s initial forecast at the start of the year was for contract rates to fall 5% to 10% in 2026
Strong demand for semiconductors and AI-related hardware helped push air cargo demand to 7% year-over-year growth in June. AI technology represents about 10% of total air cargo volume. The June volume growth was well ahead of expectations and supply, which grew 3% with the return of capacity suspended by the Middle East disruption.
The demand-supply imbalance pushed aircraft utilization up 3 points to 62%, which influenced the higher rates. But market dynamics since Xeneta’s monthly report on July 2 are quickly changing again after the United States and Iran broke a shaky ceasefire last week. The start of the Iran war on Feb. 28 immediately forced more than 12% of global air cargo capacity — in passenger belly holds and freighter aircraft — out of service because of airspace and airport closures, flight cancellations and reduced frequencies, and longer transit times for rerouting to avoid war risk.