The ongoing war in Iran has caused a significant rise in global freight rates, with spot air freight rates jumping significantly to about $3.19 per kilogram.
This sharp rise is due to a group of factors resulting from the conflict, the most important of which is the rise in insurance and operating costs, as shipping companies imposed additional fees due to increased risks and higher insurance costs for ships and voyages in the region.
The continued suspension of most foreign flights and disturbances in the Strait of Hormuz also led to a shortage of available capacity with increased demand, raising prices to unprecedented levels.
Air transport companies added an additional cost to the average global price, affected by the state of instability and changing flight routes to avoid conflict areas, while major companies announced a temporary or cautious suspension of bookings heading to the Gulf countries, which led to a backlog of shipments and pressure on profit margins in the retail sectors.
These developments come in light of the sharp fluctuations witnessed in the energy markets, as shipping pressures and high oil and gas prices were reflected in global inflation rates, amid economic warnings of some major economies entering a state of “inflationary stagnation.”
