Unpacking the Effects of Middle Eastern Tensions on MENA-Asia Trade

مقدمة

The recent escalation of conflicts in the Middle East has significantly affected air cargo operations, triggering a disruption that ripples across trade routes linking Asia and Europe through this critical region. Understanding how these developments impact logistics and trade channels sheds light on the volatile dynamics of the global shipping network.

Disruption Overview

In mid-June 2025, hostilities between regional powers created a domino effect, particularly disrupting East-West trade routes vital for air cargo transportation. With the immediate closure of airspace over countries such as Iran, Iraq, Jordan, and Israel, a wave of flight cancellations and reroutings descended upon the logistics landscape, affecting cargo shipments between South Asia, Southeast Asia, and Europe.

Shifts in Cargo Volumes

Recent data from WorldACD indicates that cargo volumes originating from the Middle East and South Asia (MESA) decreased by nearly 9 percent in the second week of June, following an 8 percent decline during the previous week. The Levant, comprised of Israel, Jordan, Lebanon, and Syria, suffered a substantial 21 percent decrease in flown tonnage due to grounded planes resulting from military operations. Furthermore, intra-MENA cargo movements contracted sharply by 26 percent, attributable to operational halts and diminished commercial demand following the Eid-Al-Adha holiday.

Freighter Capacities and Timeliness

Freighter capacity dwindled, particularly across Iran and Syria, with Iraq experiencing an alarming 84 percent drop in lift capacity. This situation has adversely impacted sectors reliant on timely shipments, such as perishables, pharmaceuticals, and electronics, where every hour counts. Despite global air cargo rates maintaining surprising stability at around US$2.41/kg, the MESA region witnesses a 22 percent drop in year-on-year rates, underscoring inefficiencies arising from rerouting and reduced cargo volumes.

The Consequential Ripples

The ramifications of this congestion have extended beyond immediate cancellations. Data from S&P Global suggests a 10 percent contraction in jet fuel demand across the Gulf, along with approximately 1,500 daily flight cancellations. These shifts ripple through auxiliary logistics services, impacting everything from aircraft fuelling to ground handling operations and ultimately influencing the overall cost of cargo operations.

Impact on Southeast Asian Exporters

Exporters in India and Southeast Asia, known for their substantial perishable air exports, have felt the crunch as flights that previously transited through major hubs like Dubai, Doha, and Abu Dhabi are now rerouted. This detour through longer routes via the Arabian Sea or Central Asia adds an average of two to four hours to transit times. Consequently, freight rates have skyrocketed by 15-20 percent for shipments destined for Western Europe and North America.

Addressing New Trade Barriers

The ongoing disruptions have introduced a new class of non-tariff trade barriers that warrant attention. The International Civil Aviation Organization (ICAO) and the World Bank have long championed the diversification of air corridors to foster a more resilient logistics framework. The principles espoused by these organizations urgently necessitate implementation in current national logistics strategies.

Proposed Resilience Agreements

For those in the Indian subcontinent and ASEAN markets, establishing air cargo resilience agreements that guarantee alternative routing rights alongside expedited bilateral approval for emergency corridor activation is key. Such agreements would buffer against future airspace disruptions. Additionally, the swift adoption of digital frameworks such as IATA’s ONE Record and e-Air Waybill could streamline compliance for rerouted consignments.

Looking Toward New Hubs

As the regional crisis unfolds, freight operators are increasingly redirecting traffic through alternate airspaces in Turkey, Azerbaijan, and Central Asia. While air traffic through UAE hubs like Dubai has seen a modest recovery of 15 percent in weekly tonnage, this growth primarily reflects diverted volumes rather than true trade expansion.

Future of Cargo Hubs

In the longer term, preferences among carriers may shift toward alternative hubs such as Almaty, Tashkent, or Muscat, contingent on investment in customs infrastructure and airside cargo handling capabilities. This evolution highlights the necessity for collaborative frameworks and diplomatic engagement across multiple stakeholders in the logistics sector, emphasizing the role of organizations like the International Air Cargo Association (TIACA) and regional initiatives such as the South Asian Regional Initiative for Transport Integration (SARITI).

Stakeholder Recommendations

In light of current challenges, here are critical action points for air transport policy professionals and industry leaders:

• Diversify critical cargo corridors, particularly along the Turkey-Central Asia-China axis and Gulf-East Africa trade routes.
• Engage in diplomatic negotiations for securing overflight rights in regions sensitive to geopolitical tensions.
• Implement mandatory digital documentation standards such as e-AWB and electronic consignment notes to minimize processing delays.
• Utilize predictive risk management systems facilitated by AI and blockchain technologies in logistics.
• Quantitatively assess the economic impacts of disruptions through platforms like India’s Unified Logistics Interface Platform (ULIP) to formulate compensation frameworks.

الخاتمة

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