What’s Going On?
Escalating Middle East tensions are driving a sharp surge in fuel prices, creating new cost pressures and tightening capacity across global supply chains. Airlines and ocean carriers are adjusting routes, reducing frequencies, and implementing emergency surcharges, even as overall demand remains moderate.
Air Outlook
Escalating fuel prices are pushing airlines to increase fuel surcharges and adjust flight frequencies, tightening capacity across key Asia Pacific markets. Countries heavily reliant on fuel imports, including Vietnam, Korea, and Thailand, may experience reduced frequencies and additional operational constraints.
Even without strong demand growth, rising fuel costs and operational uncertainty are expected to keep airfreight rates elevated.
Ocean Freight Outlook
Instability in the Persian Gulf is already disrupting shipping schedules, increasing fuel surcharges, and creating congestion at key ports. Restrictions on shipments to the Middle East are also tightening capacity across Asia Pacific.
Rising fuel costs are expected to impact the broader supply chain, including ocean, rail, and trucking operations.
The impact of rising fuel costs will be felt across the supply chain, whether through BAF adjustments or new surcharges such as EBAF. This extends beyond ocean freight to rail and road, and even without a demand surge on east–west trades, overall shipping costs are expected to trend upward due to increased fuel related cost instead of the trade hitting a peak season. Shippers should also monitor equipment availability, as any imbalance could further tighten conditions across Asia Pacific.
Trade Compliance
US trade enforcement continues to expand as multiple developments converge, including Section 122 timelines, new Section 301 investigations, FCC import controls, and rising bond exposure risks.
These developments signal a broader regulatory tightening that may impact sourcing strategies and cost structures.
US trade policy is shifting from temporary measures to sustained enforcement. The convergence of the Section 122 sunset timeline, ongoing USTR Section 301 investigations on global overcapacity and forced labor, tightening FCC import controls, and rising bond exposure signals a structural escalation in US trade enforcement. Companies should no longer view these as isolated developments, but as part of a broader regulatory tightening that requires immediate strategic alignment across sourcing, compliance, and cost management.
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Logistics providers may implement emergency surcharges amid rising fuel costs and operational uncertainty. While demand remains flat or below last year, capacity constraints and higher fuel costs are expected to keep air freight rates elevated.
VP, Global Sales and Marketing, Dimerco Express Group