Dear Customers, Colleagues, and Friends,
We are writing to provide a general update on current conditions in the global transportation market as a result of the ongoing Middle East conflict. While the situation remains fluid, the impact is already being felt across both air and ocean freight markets, particularly in the form of rising costs and schedule disruptions.
Air Freight Market Impacts
The air freight sector is experiencing the most immediate disruption:
- Flight cancellations and rerouting due to restricted airspace
- Longer transit routes, increasing fuel consumption and reducing capacity
- Rapid increases in jet fuel costs, a major driver of airline pricing
As a result, air freight rates are rising quickly, with capacity tightening across key trade lanes.
Ocean Freight Market Impact
Ocean freight is beginning to follow similar trends:
- Rising bunker fuel costs are increasing carrier operating expenses
- Canceled services to and from the effected Middle Eastern regions
- Potential routing and schedule disruptions in affected regions
- Expected fuel surcharge increases in the April rate cycles
While ocean rates have not yet spiked as sharply as air, upward pressure is building.
Fuel Costs Driving Market Changes
The primary driver across both modes is fuel price volatility. Higher fuel costs are directly impacting transportation pricing and surcharges. These effects are global, and not limited to shipments moving through the Middle East. Domestic inland transportation costs have increased to keep up with rising diesel costs.
What This Means for You
- Expect continued volatility in freight rates, especially for air shipments
- Transit times may be less reliable due to rerouting and congestion
- Fuel surcharges are likely to increase across both air and ocean freight
- Market conditions may change quickly as the situation develops
**** It is EXTREMELY IMPORTANT to review previous Customer Advisories ( 1/13/26 & 2/4/26) linked here to review the updated tariff refund procedure. We strongly suggest immediately registering for an ACE Portal account, if you haven’t already, and following the ACH REFUND AUTHORIZATION procedure.
We will continue to track all detailed guidance and will notify you as further regulatory instructions are released. In the meantime, if you have any questions or would like to discuss potential impacts on your shipments or sourcing strategy, our team at Krenz & Hannan is ready to assist.
Sincerely, Your friends at Krenz and Hannan International