This agreement is sparking the imagination of freight carriers because it promises a significant increase in tonnage due to the virtual elimination of customs barriers on both routes across the South Atlantic, from northwest to southeast and in the opposite direction. The trade agreement, which has been under negotiation for a quarter of a century between the EU and four South American countries, has provisionally come into force on 27FEB26. Only Paraguay’s signature is currently still missing.

With over 260 million inhabitants, Mercosur is the fifth-largest economic bloc in the world. For the EU, Mercosur is the tenth-largest trading partner. Conversely, the EU is the second-largest trading partner of the Mercosur countries, after China. In 2024, the trade volume between the two economic blocs amounted to approximately 111 billion euros, with more than 80% of that figure attributable to Brazil – by far the strongest South American member of the bloc in economic terms.

Core element of the scheme is the gradual elimination of tariffs on over 90% of all traded goods, which will significantly increase the exchange of industrial and agricultural items. A key motivation for the EU is the diversification of supply chains. In particular, Europe wants to reduce its dependence on China for raw materials such as lithium and other so-called rare earth elements, which are needed for batteries, electric motors, and the energy transition. The European Commission also expects that exports by European companies to Latin America could increase by up to 39%. In the long term, according to the European Commission, hundreds of thousands of new jobs could be created in Europe. Conversely, European markets are opening up to agricultural products from South America, particularly beef, poultry, sugar, and soy, even though there have been protests by French, Italian, and German farmers against this opening clause right up until recently. For cargo airlines operating routes between the two trade blocks, the agreement offers a ray of hope. Unlike with North American traffic, they anticipate a steady increase in cargo volume and stable supply chains thanks to the customs regulations. CargoForwarder Global (CFG) spoke with Enrica Calonghi (EC), Cargo Director South America at Air France KLM Martinair Cargo, and Cleverton Vighy (CV), Head of Sales and Handling Brazil and South Cone* at Lufthansa Cargo.

CFG: Erica, what impact does Air France KLM Martinair Cargo expect the pact to have on its business to and from South America?
EC: The Mercosur agreement strengthens trade relations between South America and Europe, and is expected to support higher bilateral flows, particularly for time-critical, temperature-sensitive, and high-value goods where air freight is essential.
For Air France KLM Martinair Cargo, this aligns with our focus on adapting capacity and solutions to evolving market dynamics while remaining close to customer needs across the region.
In Mercosur, sustainability and digitalization are increasingly part of commercial decision-making, especially among multinational exporters and global forwarders.
Our approach is pragmatic and operational, centered on transparency, efficiency, and available options such as emissions visibility, access to Sustainable Aviation Fuel where feasible, and digital tools that support informed decision-making. Through myCargo, customers can manage bookings and shipments 24/7, with reliable transaction handling and real-time visibility, supporting efficient trade flows between South America and Europe.

CFG: Cleverton, which cargo products are likely to benefit most from the treaty?

CV: A growth of imports such as car and auto parts, chemical goods and industrial components to involved countries is very likely. But also goods with lower value will support investments and growth in the region. On the export side, we assume a direct increase in semi-manufactured goods such as fashion and textiles. Additionally, we assume that the Brazilian and Uruguayan markets will benefit from pharmaceutical exports as well.

EC: In our view, it will be perishable goods such as fresh produce, fruit, vegetables, flowers and seafood. Those we expect to benefit most, given their time-sensitive nature. Pharmaceuticals and high-tech products should also see increased volumes, given their requirements for reliability and temperature control. In addition, automotive parts, machinery, and industrial goods are likely to benefit, particularly for urgent or high-value shipments. The continued growth of e-commerce in South America further supports demand for fast and reliable air cargo.

CFG: On which specific routes can tonnage growth be expected (both import and export?)

CV: Brazil and Argentina.

EC: Tonnage growth is expected on both export flows, such as perishables moving to Europe, and import flows, including industrial goods and pharmaceuticals into South America.

CFG: How many cargo flights does your airline operate to the South American Mercosur states weekly? How well is your carrier represented in the market?

EC: With a longstanding presence in South America, Air France KLM Martinair Cargo is firmly established in the South America region, leveraging a balanced combination of dedicated freighter operations and belly capacity on passenger flights to deliver flexible and reliable cargo solutions. As the EU-Mercosur agreement continues to evolve, we will closely monitor market developments and proactively adapt our capacity and services to ensure we effectively support our customers and partners across this important trade lane.

CV: Lufthansa Cargo manages the belly capacities of 51 passenger flights within Lufthansa Group and four freighter rotations covering Mercosur-involved countries. Due to the addition of ITA belly capacity, we were able to further increase our offer to customers in the region, over the last year. This makes Lufthansa Cargo the second biggest carrier in volumes between the EU and Mercosur countries.

CFG: Erica, Cleverton, thank you for your time and input.

*** The Southern Coneis a geographical and cultural subregion composed of the southernmost areas of South America, mostly south of the Tropic of Capricorn. In terms of geography, the Southern Cone comprises Argentina, Chile, and Uruguay, and sometimes includes Paraguay and Brazil’s four southernmost states (Paraná, Rio Grande do Sul, Santa Catarina, and São Paulo).

In 2026, geopolitical tensions have shifted from isolated disruptions to a persistent reality, shaping global logistics. Simultaneous conflicts, trade disputes, and security concerns are forcing supply chain operators to prioritize resilience and risk management over traditional cost optimization. As of MAR26, the conflict in the Middle East is disrupting energy shipments and placing additional pressure on critical transport corridors linking Asia, Europe, and Africa.

The Middle East occupies a strategic position at the crossroads of global aviation and maritime routes, making disruptions particularly difficult to absorb, and forcing airlines, shipping companies, and freight forwarders to adopt alternative routing strategies.

Market pressure intensified further when oil prices surged by about 15%, climbing above USD 105 per barrel on 09MAR26, increasing operating costs across both air and sea transport sectors.

Critical maritime corridors

The International Maritime Organization (IMO), the United Nations agency responsible for the safety and security of shipping and the prevention of marine pollution, has warned about the risks to maritime operations in the region. Approximately 20,000 seafarers, along with ship passengers, port workers, and offshore crews, are currently affected.
According to Reuters, and for the first time in modern shipping history, two of the world’s most critical maritime chokepoints are simultaneously under threat: the Strait of Hormuz and the Suez Canal–Bab el-Mandeb corridor. The latter has come under renewed pressure following announcements by Houthi forces that attacks on shipping could resume. Together, these routes connecting Asia and Europe handle roughly one-third of global seaborne crude oil trade as well as a substantial share of container shipments.
Major container carriers – including Maersk, MSC, CMA CGM, Hapag-Lloyd, and COSCO Shipping – have suspended or reduced transits through the Red Sea–Bab el-Mandeb corridor, and are rerouting vessels via the Cape of Good Hope, adding several weeks to voyage times between Asia and Europe.
Shipping lines have also begun introducing additional surcharges to offset rising operating costs. Maersk implemented an Emergency Fuel Surcharge (EFS) on 09MAR26, addingUSD 1,800 per 20-foot dry container, USD 3,000 per 40-foot container, andUSD 3,800 for reefer, special, and dangerous goods containers. Similarly, MSC has issued updated EFS notices since early MAR26 and introduced revised freight rates for shipments from the Far East to reflect the evolving situation.

Significant loss of global air cargo capacity

Airspace closures and growing instability across parts of the Middle East have significantly disrupted global air cargo networks, particularly on routes linking Asia, Europe, and Africa. The region normally functions as a major aviation corridor and cargo hub, so disruptions quickly ripple across international supply chains.
Flight cancellations and airspace restrictions have removed a substantial share of cargo capacity from the market. Data from aviation analytics firm, Rotate, indicates that around 13% of global airfreight capacity has been affected due to disrupted Gulf hubs and rerouted flights. Some market estimates suggest the impact could temporarily remove 16–18% of worldwide capacity.
This reflects the central role of major Middle Eastern hubs such as Dubai International Airport, Hamad International Airport in Doha, and Zayed International Airport in Abu Dhabi, which serve as key transfer points for long-haul cargo moving between Asia, Europe, and Africa.
As tensions intensified, airlines began cancelling or suspending services, citing safety concerns and regulatory directives while monitoring developments in the region. Major operators such as Emirates and Qatar Airways, were forced to suspend operations temporarily, removing both passenger belly capacity and freighter lift from the market.
The resulting capacity shortage has placed the air freight market under severe pressure. Freight rates have surged, particularly for shipments originating in Malaysia, Singapore, the Philippines, and India, as shippers compete for limited cargo space. In several cases, rates from Europe to the United Arab Emirates have climbed above typical express service levels, highlighting the strain on available capacity.

Disruption of the Asia–Europe air cargo corridor

The Asia–Europe corridoris among the most heavily affected routes. Around 25% of China–Europe air cargo capacity typically passes through Middle Eastern hubs, making the region a critical transit point for intercontinental freight flows. When these hubs face operational disruptions or airspace restrictions, airlines are forced to operate longer direct flights or reroute through alternative corridors.
However, direct services cannot fully compensate for the loss of connectivity provided by the Gulf’s hub-and-spoke networks, which efficiently consolidate cargo flows and distribute capacity across multiple global destinations.

Industry impact

The impact on businesses extends far beyond higher freight costs. Rerouting vessels around disrupted maritime corridors absorbs capacity that was already under pressure, increasing transit times and creating delays across trade lanes that have no direct link to the Middle East. Companies sourcing components from Asia, exporting finished goods to Europe, or relying on just-in-time supply chains should prepare for weeks rather than days of cumulative delays. For many organizations, the situation highlights the importance of supply chain resilience. Companies that respond by diversifying sourcing strategies, securing logistics capacity, and strengthening contingency planning, will be better positioned to navigate the disruption and adapt to an increasingly volatile global trade environment.

For years, the Gulf states were considered guarantors of good business, attractive tourist destinations and, thanks to world class airlines like Emirates and Qatar Airways, global hubs for passenger and air freight traffic. The rule of autocratic Monarchs ensured peace and security. That picture has now been shattered, possibly for a longer period.

Russia’s war on Ukraine and Israel’s bombing of the Gaza Strip were terrible occurrences, but far away. The Gulf region believed itself to be a haven of stability and peace. Until the morning of 28FEB26, when Israel and the U.S. launched joint military strikes against Iran.

Deserted streets
Since then, nothing has been the same in the neighboring United Arab Emirates with its strongholds of Dubai and Abu Dhabi, as well as in Bahrain, Kuwait, and Qatar. Iranian Shahed drones repeatedly struck the vacation and business centers of neighboring Arab countries, with grave consequences. The airspace over the entire region was closed, and visitors tried to get away as quickly as possible. Some countries sent charter planes to safe airports in Oman or Riyadh, Saudi Arabia, to fly their citizens out of the war zone.
In the long term, the damage to the well-maintained reputation of Dubai, Doha and other Gulf cities as hotspots of prosperity, leisure, and security, is likely to be more serious than the impact of some Iranian drones and missiles.

Image of a glittering metropolis has been tainted
Investors should invest, tourists should relax, and businesspeople should be able to do business undisturbed. This is how the Gulf states presented themselves at trade shows and in the international media, backed by paid influencers who sang the praises of the easy life there and lauded the limitless business opportunities. The fact, that the daily cleanup is mostly done by low-paid workers from Pakistan, India, or Sri Lanka, is widely ignored in the Gulf states’ own public image.

Resembling a ghost town
Air traffic is symbolic of the current standstill and expression of the shock which has befallen the Gulf rulers, paralyzing their business model with the tendency to erode it long-term. Meanwhile, some isolated passenger and cargo flights haven taken off again after days of airspace closures in the Gulf region. But the aura of a safe harbor for visitors, traders or foreign investors, and a well-working hub for transit passengers and air cargo shipments alike has been severely tarnished, to say the least. Currently, the metropolis of Dubai, which was vibrant just a few days ago, resembles more of a ghost town. And it wasn’t rainfall in the middle of last week that was to blame.

Maritime eye of the needle
To make matters worse, the conflict disrupted maritime traffic in the Strait of Hormuz, widely cutting the Gulf states off from supply. This narrow passage between UAE/Oman and Iran is a key corridor for global trade, through which about a quarter of the world’s crude oil as well as large quantities of liquefied natural gas and high volumes of fertilizers, are transported. There is no alternative to the passage.
The combination of military escalation in the Persian Gulf area and the ongoing threats in the southern Red Sea by Yemen’s Houthis, is creating a continuous risk zone along key maritime trade routes between Europe and Asia. Further escalation of the conflict poses significant risks to commercial shipping and aviation throughout the region and severely affects trade in the Gulf area with no end in sight.