Routes, risk and resilience: The transformation of global freight

Global supply chains are entering a new phase of disruption, one driven less by pandemic-era shocks and increasingly by geopolitical instability. Conflict, trade tensions and regulatory shifts are directly influencing how goods move across both ocean and air networks. The result is a freight environment defined by volatility in cost, capacity and reliability — forcing shippers to rethink long-standing assumptions about efficiency and risk. Ocean freight under pressure Ocean freight markets are currently defined by volatility in transit times, reliability and pricing. Capacity remains tight, as carriers continue to manage supply through blank sailings and network adjustments, even as new vessels enter service. Space is particularly constrained out of key Asian export hubs, where bookings often must be secured weeks in advance. Costs have surged sharply. According to Freightos’ July 9 th update, spot rates have risen more than 8% week over week to the U.S. West Coast and 8% to the East Coast, while Asia-Europe rates have climbed 11%, leaving them significantly higher than earlier this year. These increases are compounded by geopolitical disruption. Security risks in the Red Sea and uncertainty around the Strait of Hormuz have forced widespread rerouting around the Cape of Good Hope, adding 10 to 14 days to transit times and increasing fuel consumption. Figure 1: Air-ocean pricing ratio Additional pressures include rising insurance premiums — doubled in some cases — and fuel surcharges, which have climbed nearly 18% since early 2026. Resumed hostilities between the U.S. and Iran are keeping global energy sectors highly volatile. This geopolitical tension, combined with active Panama Canal draft restrictions and ongoing port congestion, is creating a perfect storm for cargo delays. At the same time, demand has surged due to tariff-related frontloading, as shippers accelerate shipments ahead of U.S. policy changes. The result is a highly compressed market where longer transit times, elevated costs and reduced reliability are forcing companies to reassess inventory strategies and modal choices. Uneven recovery for air freight Air cargo markets reflect a more fragmented picture. Geopolitical disruption, particularly in the Middle East, has driven sharp swings in both cost and demand. Jet fuel prices peaked at $209 per barrel in April before falling to around $127 by mid-July, still well above year-ago levels. Figure 2: Jet Fuel – Weekly average price per barrel (USD) While global trade volumes have grown 5% year over year, demand is uneven. Export orders weakened in May, indicating that growth is concentrated in specific trade lanes rather than broadly distributed. The Middle East illustrates this divergence: Cargo demand fell 8.9% year over year, with capacity down 9.2% amid ongoing conflict. Key corridors such as Europe-Middle East and Middle East-Asia have seen double-digit declines. Flight suspensions have reduced bellyhold capacity, increasing reliance on dedicated freighters, which grew 11% year over year. However, overall recovery remains tied to the return of widebody passenger networks — particularly those operated by Gulf carriers. As capacity gradually returns and fuel prices stabilize, the market is likely to face renewed yield pressure, especially as regulatory changes such as new EU import duties weigh on demand. In effect, air cargo demand is becoming increasingly fragmented, shaped by geopolitics and trade policy rather than broad-based growth. Geopolitics reshaping trade flows Geopolitical instability is now a central force shaping global logistics. The war in Ukraine continues to disrupt air cargo networks, particularly through Russian airspace closures affecting more than 35 countries. This has removed a key Europe-Asia corridor, forcing airlines to adopt longer routings. Carrier responses have varied. Airlines such as Cathay Pacific , Lufthansa and Singapore Airlines avoid Russian airspace, while others — including Emirates , Qatar Airways and Turkish Airlines — have maintained access, gaining a competitive advantage. For those rerouting, longer flight paths increase fuel burn, reduce payload capacity and disrupt schedules, tightening supply and raising costs. At the same time, U.S.-China trade tensions and evolving sanctions regimes are driving frontloading, shifting sourcing strategies and increasing compliance complexity. Overlaying these trends is a broader move toward reshoring and nearshoring, as companies prioritize resilience over cost efficiency. Across both air and ocean freight, the operational impacts are clear: disrupted routing, higher costs and increased regulatory burden. Collectively, these forces mark a structural shift in global logistics, with supply chains increasingly designed for resilience rather than efficiency. Modal shift and multimodal strategies As disruption intensifies, modal choice is becoming more dynamic. Shippers are increasingly shifting between ocean and air freight based on urgency, cost and reliability. Air freight is typically used when speed is critical, while ocean remains dominant for cost-sensitive goods. A growing trend is the use of hybrid sea-air solutions. In these cases, high-priority goods are extracted from delayed ocean shipments at intermediate ports and transported by air, while the remainder continues by sea. This approach has become particularly relevant as Red Sea disruptions have extended transit times by up to two weeks. Although air freight carries a higher cost, it can be justified when compared to the financial impact of production stoppages. By moving just 5% to 10% of cargo by air, companies can significantly reduce overall logistics costs compared to full air transport while still accelerating time-to-market. Infrastructure investment is also supporting diversification. Projects such as Saudi Arabia’s east-north rail corridor are creating alternative routes that reduce reliance on high-risk maritime chokepoints. Together, these strategies reflect a broader shift toward flexibility, with air freight increasingly positioned as a strategic complement to ocean transport rather than a last-resort option. Impact on stakeholders Geopolitical disruption is reshaping the roles of key stakeholders across the supply chain. Shippers face rising costs and are adopting more strategic approaches, including diversified routing and multimodal solutions. Lower-value goods remain more exposed to delays, as they are less likely to shift to air freight. Freight forwarders are playing an increasingly important advisory role, helping customers navigate complexity and optimize modal choices. Industry consolidation — such as the sale of FedEx ’s supply chain unit to CMA CGM — highlights growing integration across logistics services. Airlines are benefiting from demand for speed and reliability but remain exposed to fuel volatility and operational disruption. Ocean carriers continue to manage capacity while capitalizing on rate increases during periods of constraint. From Cost Efficiency to Resilience: Adapting Freight Strategies to a New Global Reality Global freight markets are undergoing a structural transformation. Geopolitical risk is no longer an external shock but a persistent force shaping how goods move around the world. Across both ocean and air freight, the focus is shifting from cost optimization to resilience, flexibility and risk management. In this environment, supply chains must adapt to a new reality defined by uncertainty and complexity. Companies that can dynamically balance cost, speed and reliability — while leveraging multimodal strategies — will be best positioned to navigate ongoing disruption and maintain competitive advantage in global trade.

Routes, risk and resilience: The transformation of global freight

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