News / Forwarders fear lasting rate pain as Iran war cuts India airfreight lift

© Denis Belitskiy

Airfreight capacity out of India has plummeted since the onset of the US and Israel’s war against Iran, leading to a surge in rates that has left forwarders panicking that carriers may try to hold onto these elevated levels even if conditions improve.

Per Rotate’s Live Capacity Database, Indian freighter and widebody passenger lift has dropped by circa 70% across all airports, with its two busiest gateways, Delhi and Mumbai, particularly badly hit, the former recording a 72.5% drop in total capacity, while for Mumbai the downturn was even worse, at 74.9%, since the week starting 23 February.

Forwarders based across India told The Loadstar that “pretty much since day one” of the war they had been struggling to secure capacity, while those that had were being forced to pay over the odds for it; “all of this is being passed onto our customers”.

“Emirates and Etihad are responsible for handling round 5% of our Chennai exports but their flights account for some 30-40% of available cargo capacity out of the airport, so when they go offline there is a massive surge in demand,” one forwarder said.

A Mumbai-based forwarder told The Loadstar: “There just isn’t the lift to meet demand and the lift that there is being quoted at an extortionate price. We have seen rates jump three, three and half times, what we were paying the day before the bombing started.”

Freightos Terminal supported claims of a surge in rates, albeit by a slightly lower degree, with the platform reporting medium rates from India to Europe having jumped from $3.57 per kg on 2 March to $6.47 on 16 March.

Four days before strikes against targets inside Iran began, Freightos was quoting a maximum per kg price of $4.28, which has jumped to $7.71 today, while WorldACD has similarly pointed to a 50% spike in rates since the onset of the conflict.

The fear now is that carriers will try to keep rates locked in at the higher level even if the war ends, or its impact on wider global supply chains significantly reduces. One forwarder noted: “They’ve achieved these rates against Indian forwarders, and they’ll be eager to hold them.”

A dearth in available full-freighter capacity has been equally battered by the conflict, which is only likely to exacerbate those fears, with Rotate recording a 69.8% decline in full freighter space out of Delhi and a 75% drop for Mumbai, with smaller, regional gateways similarly impacted.