Due to rising fuel costs and congestion in key waterways in the Middle East, some shipping companies are seeking alternative transport routes in unexpected places, as a ceasefire between Iran and the US is not expected to provide a quick solution. An American shipping agent reported that clients who previously transported electronics and other consumer goods from Asia to Europe via Middle East hubs are now sending their goods via ships and planes through Los Angeles to get cheaper prices. «This route is much faster than maritime shipping around the Cape of Good Hope, and much cheaper than direct air freight,» said Ryan Peterson, CEO of Flexport. Air freight costs have increased significantly due to strong demand and rising fuel prices as Iran continues to close the vital Strait of Hormuz. According to World ACMI Market Data, air freight capacity to the Middle East has shrunk by more than 50% year-on-year in the last two weeks. Flexport noted that long-term air freight contract prices from Vietnam to Europe have nearly doubled, reaching $6.27 per kilogram compared to pre-war levels. In contrast, air freight rates from Los Angeles to Paris have only increased by 8%, and airlines have added more passenger flights due to high demand, allowing for greater air cargo capacity. «We may see an increase if the trade disruptions in the Middle East continue,» said Noel Hasegawa, CEO of the Port of Long Beach, part of the busiest US marine port complex in Los Angeles. Marco Blumen, managing director of Eifion Consulting, stated that global air freight capacity, which was expected to grow by 5.5% this year, has decreased by 1% so far due to the war in Iran. He added that the course of the year will partially depend on the resumption of operations of wide-body passenger aircraft by major Gulf airlines, which represent nearly half of the air freight capacity in the region. Neil van de Woe, head of air cargo at the Zentia pricing platform, noted that a delay in the recovery of tourism in the Gulf after the fighting may prompt airlines to reduce passenger capacity, which will affect air cargo. British Airways announced on Thursday that it would reduce flights to the Middle East when services resume, indicating that rising regional tensions will negatively impact demand. Specialized shipping companies, such as UPS, continue to operate in the region under «emergency plans». Aircraft chartered by third parties have been brought in to cover some flights, but fuel supplies are expected to remain limited and expensive for months. «Everyone's main problem is the sharp increase in fuel prices,» said Dan Morgan Evans, cargo manager at Air Charter Service. Ryan Carter, Vice President of Americas at AIT World Logistics, said that one of the company's clients spent at least five to six times the usual amount to transport drilling equipment to Saudi Arabia for oil exploration by air and land after the scheduled sea voyage from Houston was canceled due to the war. Nevertheless, many companies feel they have no choice but to pay extra for air freight.
