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The Iran conflict has escalated and is introducing logistics problems for Russians and other foreigners in the Middle East region, with the impact being felt from Egypt, Israel, the United Arab Emirates, Saudi Arabia, Turkiye and Qatar, while also affecting onwards transit to India, China and other Asian destinations. Russian logistics companies are seeing delays in the delivery of goods throughout the region, while cross-border deliveries are also impacted.
The Arabian Peninsula is a large transfer area, especially the UAE and Qatar, through which significant quantities of cargo flies to Russia. The airspace is currently closed only in Iran, Israel, and Iraq, through which nothing is transported. This means that the duration of flights has increased, routing instead through Afghanistan and Pakistan, meaning the cost of transportation has increased. Additionally, numerous flights have been cancelled, meaning their cargo had to be reloaded onto shipping alternatives.
Vladimir Voroshilov, CEO of Bedford Group, says: “Transit through Turkish territory, through Iranian territory via the ‘North-South’ corridor, and traditional routes through Azerbaijan are all operational. However, transit through these countries is associated with risks that have arisen due to the war between Israel and Iran. They affect both air transport and cargo that was transiting to other countries in the Persian Gulf. The volume of available operations is very difficult to estimate. There is a possibility of cargo loss or damage. When it comes to Indian imports, tea and some consumer goods are, of course, the main items going to Russia. Nothing is hindering Turkish-Russian trade. For Iranian goods, primarily agricultural products, early-ripening vegetables and fruits, of course, the issue of regularity and speed is important. The disruptions that exist cause damage and unnecessary stress to trading companies.”
Intercontinental routes
Delays are also occurring when importing goods from other continents. For example, some aircraft from South America also pass over Israel and Iran to the Middle East and vice versa. Fedor Virin, a partner at Data Insight, an analytical company, believes that the cost of delivery has now increased by 20%. But it is possible that the damage could become more serious: “A fairly large volume of urgent commercial and consumer goods are transported in the trunks of airplanes, which are supplied from a wide variety of countries.”
Damages and Risks
Virin continues “The economic damage to trading companies depends on how long the skies will be closed, how long they will have to fly around, and whether airspace closure spreads to neighboring countries. At present, the damage looks like it will increase costs by 20%. But if it spreads to neighboring countries, then the damage will be significantly greater. Air travel and cargo transportation by airplanes are things that can only be replaced by the sea; these are completely different cargoes and take a long time.
New delivery routes will appear to replace them; however, these are more complicated and more expensive, but they will simply replace the delivery routes that are available now.”
Readers should note that the following airlines have announced regional flight cancellations: Air Astana, Emirates, Etihad, Flydubai, Qatar, and Singapore Airlines, although the situation is fluid.
Insurance Claims
Ilya Mironov, deputy director of the international client department at the insurance broker Remind, says that in case of flight delays, compensation should be expected only in exceptional cases. As concerns cost recovery through cargo, so far there have been no major changes, because the conflict is only about air cargo delivery delays. Although air cargo is usually the most urgent, transportation by air does not account for the largest volume turnover, which is mainly carried by road or ship. However, this could rapidly change if the Strait of Hormuz is blocked and tensions spill out further into the Red Sea.
It should be noted that in 99% of cases, insurance will not cover clients if claims are purely about delivery; however, there are rare exceptions for very specific cargoes, for example, in pharmaceuticals, where a delay can lead to the death of the live biological and similar goods, including violations of the cold storage regime of transportation and so on. It is also possible to insure against military risks in maritime and aviation transportation, but military risks are considered literally and are expensive. Payments would only be made if the cargo is hit by a missile, is damaged or destroyed.
Travel Advisory and Recommendations
Since June 13, many passenger airlines have imposed restrictions due to the closure of airspace over the territories of the affected countries. According to the Consulate General in Dubai, this immediately impacted about 10,000 Russians who were not immediately able to fly out of the Emirates. Other Russians have been unable to leave Israel.
Passengers should check what flights are available and be prepared to pack a small carry-on overnight suitcase in case of any delays or cancellations while in transit. Aeroflot is continuing services to the UAE and has replaced aircraft with more spacious Boeing 777s to keep up with demand. Many expatriate Russians leave the Gulf at this time of year anyway and prefer to holiday in Russia. But digital nomads based in the region are also departing due to the risk of being stuck.
We recommend passengers register with their embassy wherever they are in the Middle East. This may be useful if a more serious situation develops and evacuation is required. It is easier for them to assist if they know where you are.
Keep in contact with your chosen airline, and even though flights are announced, pack a carry-on travel bag suitable for overnight needs in the event of any unplanned delays. Most regional airports also have airport hotels, which, although expensive, can be an option if delayed for several hours. If with children, pack toys, sweets, and an entertainment device.
It may be possible to re-route your journey via other regional hubs. At present, Turkish Airlines maintains regional operations, and it may be possible to use other regional airlines with connecting flights to travel to and from Russia. Bear in mind ticket prices may increase, in which case it may be an idea to treat it as a short holiday (such as a flight to Baku) and spend a few extra days in a destination while in transit to make the best of the situation.
Further Reading
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