The air freight costs are expected to rise at least 30 percent as many airspace of the Middle East region closed due to the rising tensions, according to the Hong Kong Association of Freight Forwarding and Logistics (HAFFA).
Gary Lau Ho-yin, chairman of the HAFFA, cautioned on Tuesday that the conflict in the Middle East is crippling trade routes, forcing many airlines to reroute through Middle Eastern airspace for flights to Europe.
Lau emphasized that the situation will likely have a cascading effect on air freight sources from the Middle East to Europe, subsequently affecting exports from Hong Kong.
With the shortage of available air freight space, he anticipated a minimum 30 percent price increase in logistics costs.
As for the Strait of Hormuz was also closed amid escalating conflicts in the Middle East, Lau said while the impact on the maritime sector is still under observation, he anticipates a similar trajectory.
If the situation persists, he believes that shipping companies may seek alternative maritime routes or potentially utilize rail transport to deliver goods to Europe.
This followed Iran’s Revolutionary Guard Corps (IRGC) announcing that the strait was “closed”, warning that any vessel attempting to pass through would be set “ablaze.”
Logistic provider Ocean Network Express (ONE) reported that approximately 750 ships are currently stranded in and around the strait.
Among them are about 100 container ships, accounting for about 10 percent of the world's container fleet.
