The global air cargo industry is under mounting pressure from escalating geopolitical tensions and disruptions to energy supply chains, driving up costs and prompting businesses to rethink logistics strategies.
Higher shipping rates, fuel surcharges and limited capacity have pushed the sector into a more expensive and volatile phase since early 2026, reducing its appeal for high-value and time-sensitive shipments.
Companies are increasingly shifting toward lower-cost alternatives such as maritime transport and multimodal logistics, industry officials say.
Yukki Nugrahawan Hanafi, Senior Vice President at International Federation of Freight Forwarders’ Association (FIATA) and Advisory Board Member at CILT, said rising energy prices linked to geopolitical conflicts have significantly affected the sector.
“Global aviation fuel prices hike have historically been in the range of $75–$87 per barrel, but are now around $175–$200,” he said. “This has reduced global air cargo demand by about 22%, with the Asia–Europe corridor declining by as much as 39%.”
The shift is expected to have spillover effects on Indonesia’s logistics system, which remains heavily reliant on land transport, accounting for roughly 90% of domestic distribution.
Analysts warn that rising air cargo costs could redirect freight to land and sea routes, increasing pressure on infrastructure that already faces capacity and efficiency constraints.
“This shift presents an opportunity for maritime and land logistics operators,” Yukki said.
“But it can only be fully realized with improved operational efficiency and stronger connectivity between ports and hinterland areas.”
The current market conditions underscore the urgency of developing an integrated, multimodal logistics system in Indonesia, combining land, sea, rail and air transport.
Rail logistics, particularly along the Java corridor, remains underutilized and could offer a more efficient alternative for certain types of cargo, industry observers say.
The changes are also reshaping business behavior, with shippers becoming more cost-sensitive and extending supply chain planning horizons, including by increasing buffer stock levels.
At the same time, logistics providers are under pressure to evolve beyond basic transportation services into strategic partners offering end-to-end, integrated solutions.
Industry players say the disruption in global air cargo markets presents an opportunity for Indonesia to accelerate long-term logistics reform.
“What is needed is not just a short-term response to rising costs, but a long-term strategy to build an integrated national logistics system,” Yukki said.