Cargo agents seek relief as war leaves export shipments stranded at airports

New Delhi: India’s air cargo agents have urged the government to step in and provide relief to exporters hit by flight disruptions caused by the escalating war between Iran and the US, which has led to widespread airspace closures across parts of West Asia.

In a letter dated 2 March to the Economic Advisor of the Directorate General of Civil Aviation (DGCA), the Air Cargo Agents Association of India (ACAAI) sought a waiver of demurrage charges on export cargo stranded at airport terminals due to cancelled or delayed international flights. Mint has seen a copy of the letter.

Demurrage charges are daily penalties imposed when a cargo remains inside the terminal, port, or depot beyond the agreed "free time".

The letter highlighted that recent geopolitical developments have led to route restrictions, diversions, schedule irregularities and operational constraints at certain overseas airports. “The delays in upliftment are purely on account of external factors beyond the control of exporters, customs brokers, or air cargo agents,” the letter said.

As per industry estimates, only 12 hours of free storage time is available to forwarders and shippers. After that, charges range from ₹2–3 per kg per day for normal cargo to ₹8–9 per kg per day for special cargo, with costs increasing with each passing day.

Air cargo agents are seeking relief because they handle exporters’ shipments and are directly affected by flight disruptions. Airspace closures have forced rerouting, pushing up freight costs and causing delays. This hits their margins, locks up working capital and raises the risk of penalties for late deliveries.

Emails sent to Adani Airports Holdings Ltd and GMR Airports Ltd—two of the largest private airport operators in India—did not elicit any response. Aviation regulator DGCA, too, did not respond to requests for comment.

The country's aviation safety regulator, in an advisory issued on 28 February, flagged a “significant escalation in security risks” for civil aviation following coordinated US and Israeli military strikes inside Iran and Tehran’s retaliatory measures. Airlines were advised to avoid operating across eleven Flight Information Regions, including Iran, Iraq, Israel, Jordan, Saudi Arabia, the UAE, Qatar, and Oman, until at least 2 March.

Indian airports together handled around 3.3–3.7 million tonnes of air cargo in recent years, estimates EY.

"The current airspace disruptions over West Asia represent more of a network-efficiency shock than a demand shock for India’s air cargo sector. West Asia accounts for roughly 15–20% of India’s merchandise exports and, more importantly, serves as a critical transit corridor to Europe, Middle East and North America. Any instability in this geography, therefore, affects not just direct trade flows but also onward connectivity for high-value, time-sensitive exports," said Bhavik Vora, partner, Grant Thornton Bharat.

The challenge is compounded by existing Pakistan airspace restrictions on Indian carriers. A key structural factor is that a substantial share of international air freight moves in the belly hold of commercial passenger flights. The result is effective capacity tightening, longer transit times and upward pressure on freight rates, he said.

"In this context, demurrage becomes a working-capital strain rather than an operational lapse. A temporary waiver or calibrated relief would be commercially pragmatic during force majeure conditions while supporting export continuity," Vora said.

Force majeure is a contract clause that relieves parties from liability when unforeseeable events - such as wars and natural disasters - beyond their control prevents them from meeting their obligations.

The war, which began on 28 February with coordinated US and Israeli strikes on Iran, has since widened as Iran has launched missile and drone attacks on American and allied military bases and infrastructure across the Gulf, including in Saudi Arabia, the United Arab Emirates (UAE), Qatar, Bahrain and Kuwait.

With flight operations disrupted due to the West Asian crisis, export consignments scheduled for airlift to international destinations have remained stuck at cargo terminals across India. Under existing tariff rules of Cargo Terminal Operators (CTOs), demurrage charges become payable if cargo stays beyond the stipulated free-storage period. Exporters are now facing the prospect of paying additional charges despite the delays being triggered by external factors.

Air cargo is often used to handle time-sensitive goods such as pharmaceuticals, perishables, electronics and engineering products.

The air cargo agents' association has requested the Union ministry of civil aviation to issue suitable guidance to cargo terminal operators to waive demurrage charges for export consignments that could not be airlifted due to flight disruptions or airspace constraints arising from the ongoing crisis. The waiver, it said, should apply for the relevant affected period.

The ACCAI called for a temporary relief measure that would help maintain continuity and confidence in India’s air cargo trade during a challenging period.

A similar situation of stranded consignments has also been seen in sea cargo movement, where logistics companies are coordinating with port operators to minimize disruption.

“CFSs (container freight stations) play a proactive and supportive role in enabling faster evacuation at ports and ensuring a smoother flow of export cargo to terminals. We are working closely with port authorities, terminal operators and trade associations across all major ports, and are continuously monitoring the situation,” said Suresh Kumar R., managing director, Allcargo Terminals Ltd, a Mumbai-based CFS operator.

A container freight station is a facility near a seaport where export and import cargo is handled before it is loaded onto ships or after it is unloaded.

CMA CGM, a France-based global shipping and logistics company, has instructed all vessels currently in the Gulf, or bound for the region, to proceed to shelter with immediate effect, according to a statement issued on 28 February.

“Passage through the Suez Canal has been suspended until further notice, and vessels will be rerouted via the Cape of Good Hope,” the shipping company said, adding that customers will be contacted as soon as it has more details of the possible alternative ports where their cargo could be discharged.