Fuel Price Shock from Iran Tensions: Major Air Cargo Carriers Trigger Surcharges

Source: Supply Chain Dive

Air freight carriers are rushing to issue or adjust fuel surcharges as prolonged market disruptions from the conflict in Iran continue to squeeze supply and cause severe volatility in fuel costs.

The global logistics network has faced continuous disruptions and escalating freight costs following US airstrikes in Iran in February. In particular, the closure of the Strait of Hormuz—a critical maritime corridor for the transport of oil and other commodities—has provided a catalyst sending fuel prices skyrocketing.

According to data from the US Energy Information Administration (EIA), on April 27, the spot price of kerosene-type jet fuel in the US Gulf Coast region hit $4.03 per gallon. This figure is roughly 42 cents higher than the previous week and nearly double the price during the same period last year. Earlier this month, data platform Xeneta also reported that air freight rates from Northeast and Southeast Asia to North America experienced double-digit growth due to pressure from fuel costs.

Beyond elevating cost risks, fuel volatility is also creating a domino effect across the entire global aviation market. Commenting on this issue, a representative from logistics provider Rhenus Logistics told Supply Chain Dive: "When flights are rerouted or capacity is not available, this increases fuel burn and reduces the availability of payload, alongside limited jet fuel availability. All of this impacts schedules and reliability, as carriers adjust their operations."

This picture of disruption is not limited to air freight. Supply chain managers are bracing themselves against price hikes across all modes of transport. Ocean carriers (MSC, CMA CGM, ONE, and Maersk) have implemented fuel surcharges and rate increases; diesel prices for trucking remain stubbornly high; and express delivery giant UPS applied a Surge Emergency Surcharge starting April 19 for a wide range of US import and export shipments.
Below is a comprehensive overview of how domestic and international airlines are establishing surcharges to create a buffer against fuel price volatility:

United Cargo

United Airlines' cargo division announced the implementation of a "Market Disruption Fee" for shipments moving on or after May 1. This fee covers US domestic shipments as well as cargo originating from the Americas, Asia-Pacific, Europe, the Middle East, India, and Africa. The highest surcharge is applied to shipments from the Asia-Pacific region at $0.55/kg.

During the company's earnings call on April 22, United CEO Scott Kirby stated that the carrier is working to navigate the impacts of jet fuel prices doubling, while also making "short-term tactical adjustments" to balance costs. He also noted that flying routes that "burn cash in a high-fuel-price environment" is irrational, and any network adjustments will impact available belly capacity: "We obviously have some time to see what happens, but if jet fuel remains elevated compared to our pre-war levels as we think it might, we’d once again expect to require less capacity growth in 2027 than we were planning just two months ago."

Air Canada Cargo

According to an April 16 update, Air Canada Cargo announced the rollout of an "Airfreight Carrier Surcharge" to partially offset sharply rising fuel costs, airport fees, and air traffic control charges stemming from the Middle East conflict.

Effective April 27, the surcharge rates are tiered based on flight length: short-haul, medium-haul, and long-haul. The carrier also affirmed that this surcharge will be reviewed and adjusted regularly to track closely with actual market developments.

Cathay Cargo

The Hong Kong-based carrier—the cargo arm of Cathay Pacific—is maintaining a bi-weekly cadence for reviewing and adjusting fuel surcharges, as the Middle East situation continuously roils commodity prices. A company spokesperson stated: "Like many airlines, Cathay undertakes fuel hedging to manage fuel price volatility. However, in 2026 our hedging covers only around 30% of the crude oil component and hedging does not apply to the refinery component, making this measure insufficient given the scale of the recent surge in jet fuel price."

Despite this, Cathay Cargo announced a slight reduction in surcharges for short, medium, and long-haul flights, effective May 1.

ANA Cargo

A representative from Japan's ANA Cargo stated that the carrier had maintained fuel surcharges even before the military conflict in the Middle East erupted, but subsequently had to recalibrate them to adapt to the sudden price spikes caused by the war: "We will continue to assess the future application of the fuel surcharge while taking into consideration trends in the fuel market and the international air cargo market."

See more:

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• SITC updates Vietnam-Intra Asia sailing schedules in May 2026
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• CMA CGM Announces FAK Rate Increase on the Asia-Mediterranean Trade Lane Starting May 2026

Source: Phaata.com (According to Supply Chain Dive)

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