Sea and air freight and the Israel conflict


Despite reports of congestion and a backlog of cargo at the Israeli ports of Haifa and Ashdod, as well as the closure of smaller ports around the coastal Gaza enclave, other major ports have so far not been impacted by the conflict between Israel and Hamas. Israeli ports handle about 0.4 per cent of the world’s container throughput, so disruptions to the global container trade flow are limited.

Nevertheless, the Maritime and Port Authority of Singapore (MPA) is monitoring the security situation in the Middle East amid global concerns that the conflict could trigger broader regional tensions.

The impact on the airfreight market is anticipated to evolve due to the Israel conflict, with the extent of these changes hinging on the scope of the conflict’s escalation. With sea freight somewhat comprised in Israel, some are moving towards airfreight.

The conflict has indeed had an impact on the airfreight market, particularly due to the suspension of services to Tel Aviv by scheduled airlines. The disruption in air travel can lead to changes and challenges in the airfreight industry, and the extent of these changes depends on the duration and intensity of the conflict.

Charter brokers, like Chapman Freeborn, have reported an increase in requests for cargo charters as scheduled passenger flights to Tel Aviv are suspended. These requests include flights from various international destinations to Ben Gurion Airport (TLV) in Tel Aviv, such as a 747F from New York, a 737F from Frankfurt International, and a 777F from Singapore Changi.

The cancellation of services by major airlines like British Airways (BA) and Turkish Airlines to Tel Aviv can create a higher demand for charter services to transport cargo and potentially passengers during the conflict. Charter services become essential in situations where scheduled flights are disrupted due to geopolitical or security concerns.

The airfreight market is sensitive to disruptions in air travel, and the situation in Israel is a clear example of how conflicts and geopolitical events can affect the industry. Depending on how the conflict unfolds and how long the disruption lasts, the airfreight market may see increased demand for charter services and, subsequently, adjustments in pricing and availability. Airlines, charter brokers, and logistics companies will need to adapt to these changing conditions to ensure the smooth flow of goods and people in the region.

The other concern is the conflict could spread, with worries for Lebanon in particular. But there is also a fear that if Iran is drawn into the conflict, there will be an impact on fuel prices. The price of oil jumped immediately after the news of the Hamas attack, but fell again shortly after.

Sources: The Loadstar