Travel and Hospitality

The impact of geopolitical events on air freight logistics

In today’s interconnected world, the impact of global events on supply chains is undeniable. Businesses rely on global air freight to transport goods efficiently across borders, but geopolitical events significantly influence the industry’s stability, cost structure, and operational efficiency.

Trade disputes, regional conflicts, economic sanctions, and regulatory changes can cause ripple effects across air freight networks, leading to delays, increased costs, and supply chain disruptions. For decision-makers in procurement, finance, and operations, understanding these influences is crucial for mitigating risks and maintaining resilient logistics operations.

Key geopolitical events impacting air freight logistics

Several geopolitical developments directly or indirectly influence global air freight operations:

• Trade wars and tariffs – Trade restrictions and retaliatory tariffs increase costs and shift manufacturing hubs, altering freight routes.
• Regional conflicts and military tensions – Wars and military escalations result in airspace restrictions, higher fuel costs, and rerouted cargo flights.
• Sanctions and export controls – Governments impose trade bans or restrictions, limiting the movement of specific goods and disrupting air freight schedules.
• Pandemics and public health policies – The COVID-19 pandemic demonstrated how global crises can ground flights, limit cargo space, and create massive bottlenecks.
• Climate policies and carbon regulations – Stricter environmental policies raise fuel prices and force air freight companies to adopt sustainable solutions.
• Cybersecurity and digital trade regulations – Cyber threats or data-sharing restrictions can cause delays and compliance challenges.

How geopolitics is reshaping air freight logistics

Geopolitical events drive both negative and positive changes in global air freight logistics. While challenges such as increased costs and regulatory hurdles create uncertainty, certain geopolitical shifts also open up new opportunities for the industry.

Negative impacts of geopolitics on air freight logistics

Geopolitical tensions create significant challenges for air freight logistics, affecting costs, supply chains, regulations, and overall efficiency. From rising operational expenses to security risks, these disruptions impact the industry's ability to maintain smooth and reliable cargo movements.

1. Rising operational costs: Tariffs, fuel surcharges, and rerouting expenses drive up costs for air cargo carriers, while operating in high-risk zones leads to increased insurance premiums.
2. Severe supply chain disruptions: Political instability in key regions results in flight cancellations and rerouted shipments, while new trade policies contribute to port congestion and customs delays, disrupting just-in-time supply chains.
3. Regulatory uncertainty and compliance challenges: Constant changes to import and export restrictions create compliance complexities, while evolving customs and security regulations further slow down freight clearance, adding to operational delays.
4. Reduced cargo capacity and route restrictions: Geopolitical tensions force airlines to avoid certain airspaces, reducing direct route options. At the same time, passenger flight reductions limit available belly cargo space, further straining overall air freight capacity.
5. Disruptions in key manufacturing and supplier networks: Trade restrictions push companies to relocate production hubs, affecting freight demand, while political instability in key sourcing regions adds volatility to supply chains.
6. Currency fluctuations and financial instability: Geopolitical uncertainty triggers fluctuations in exchange rates, increasing international transaction costs and creating financial instability for logistics providers.
7. Security threats and risks to cargo safety: Piracy, terrorism, and border conflicts heighten security risks for freight movements, while stricter screening measures lead to shipment delays and added regulatory burdens.

Positive impacts of geopolitics on air freight logistics

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While geopolitical shifts create challenges, they also drive innovation, resilience, and new opportunities in air freight logistics. From diversified supply chains to technological advancements, these changes are reshaping the industry for the better.

Diversification of supply chains and logistics networks

Companies are moving away from single-country reliance, adopting multi-region sourcing strategies that open new freight corridors. This redistribution of trade routes also benefits emerging markets by increasing cargo movement and economic activity.

Growth of nearshoring and regional trade hubs

Businesses are relocating manufacturing and warehousing closer to consumption markets, reducing transit times and improving supply chain efficiency. As a result, intra-regional air freight services are in higher demand, strengthening local logistics infrastructure.




Acceleration of technological innovation in logistics

Advanced technologies like AI, blockchain, and IoT are enhancing cargo tracking, risk forecasting, and operational efficiency. At the same time, automated customs clearance and e-freight solutions are streamlining compliance and reducing delays.




Resilience-driven investments in infrastructure

Governments and private investors are allocating funds for airport expansions and logistics hubs, improving air freight capacity. Additionally, advancements in cold chain logistics are boosting demand, particularly for pharmaceuticals and perishable goods.




Sustainability-driven advancements in air freight

Airlines are investing in fuel-efficient aircraft and carbon offset initiatives to meet sustainability goals. Regulatory pressures are also accelerating the adoption of sustainable aviation fuel (SAF), driving long-term environmental benefits.




Increased collaboration between public and private sectors

Stronger partnerships between governments and logistics providers are leading to more trade-friendly policies and efficient cross-border freight movement. Bilateral agreements are further facilitating smoother international logistics operations.

Building a geopolitically resilient air freight industry

To counteract geopolitical risks, businesses and logistics providers must invest in resilience and flexibility within global air freight operations. Key strategies include:

• Dynamic supply chain strategies – Adopting flexible sourcing and alternative freight routes to minimise disruptions.
• Advanced risk analytics and forecasting – Using AI-driven models to anticipate political risks and optimise freight planning.
• Diversified logistics networks – Expanding partnerships across multiple regions to reduce over-reliance on specific trade lanes.
• Sustainable and regulatory-compliant operations – Investing in carbon-neutral logistics and compliance-ready processes.
• Strong collaborative partnerships – Strengthening alliances with suppliers, carriers, and policymakers to navigate trade uncertainties.

How Infosys BPM supports businesses through air freight solutions

Navigating the complexities of global air freight requires efficiency, compliance, and cost control. Infosys BPM delivers end-to-end airline cargo solutions that streamline operations, from optimising cargo space allocation and managing airway bill verification to handling claims and revenue protection. By leveraging AI-driven analytics and digital transformation, we help businesses enhance flight utilisation, mitigate risks, and automate key processes. With seamless ULD inventory control and real-time insights, our solutions ensure smooth cargo movement across airline networks, improving overall efficiency and customer satisfaction.