+400 percent air cargo, 55 billion Gulf market at risk: how Middle East tensions threaten fashion’s retail calendar

Escalating tensions involving Iran, Israel and the United States are beginning to ripple through the global fashion industry, raising concerns among retailers about delayed shipments, surging transport costs and potential stock shortages across the Middle East.

Beyond temporary store closures, the real disruption is unfolding upstream — inside the complex logistics networks that move clothing and accessories from Asian factories to retail shelves worldwide. For an industry built on tightly synchronised seasonal calendars, even small disruptions can quickly cascade into missed sales opportunities.

The Middle East plays a dual role in this system. It is both a lucrative retail market and a critical logistics crossroads for global trade. According to the Dubai Chamber of Commerce, the fashion market across the Gulf Cooperation Council (GCC) was valued at roughly 55 billion dollars in 2024, supported by high levels of luxury consumption, tourism and some of the world’s largest shopping malls in cities such as Dubai, Doha and Riyadh.

But the region’s strategic position also makes it highly vulnerable to geopolitical shocks.

Strategic trade routes under pressure

The Middle East sits at the intersection of several of the world’s most important maritime corridors. The Suez Canal, the Red Sea and the Strait of Hormuz together form a key artery linking manufacturing hubs in Asia with consumer markets in Europe and beyond.

According to data from UNCTAD and the International Energy Agency, between 12 percent and 15 percent of global trade passes through the Suez Canal each year. For the fashion industry — heavily reliant on container shipping — these routes represent one of the most efficient pathways connecting production centres in China, Bangladesh, Vietnam and India with retailers worldwide.

The intensifying regional tensions are already beginning to disrupt these flows. Shipping companies operating in the region have been forced to adjust routes, suspend cargo bookings and cancel port calls in response to the deteriorating security environment.

Nils Haupt, senior director group communications at German shipping giant Hapag-Lloyd, confirmed that the company has had to modify its operations significantly in recent days.

“Some ports are no longer being called due to the security situation,” Haupt said. “One of them is Jebel Ali in Dubai, which normally acts as a key hub for cargo in the region.”

The port of Jebel Ali serves as a major redistribution centre for goods moving throughout the Gulf. A reduction in vessel calls there can therefore ripple across the broader regional supply chain.

Hapag-Lloyd has also temporarily suspended bookings for shipments to several Gulf markets. “We currently have around seven or eight countries where we cannot accept cargo bookings for import or export,” Haupt explained.

Those include the United Arab Emirates, Iraq, Kuwait, Qatar, Bahrain, Oman and parts of Saudi Arabia, notably the ports of Dammam and Jubail.

The disruption means that containers already travelling through the region may not reach their intended destinations. “We have containers on board that cannot be delivered at the moment,” Haupt said. “We have to find alternative ports where we can temporarily offload them.”

Retailers face supply chain uncertainty

For fashion retailers, the implications are immediate. Unlike many other industries, fashion operates on highly synchronised production and distribution schedules. Seasonal collections are manufactured months in advance but are delivered to stores according to carefully planned retail calendars. Any disruption in shipping timelines can therefore cascade through the entire sales cycle.

Most clothing sold in the Middle East is produced in Asia and transported via container ships passing through the Red Sea and the Suez Canal before reaching distribution hubs in the Gulf or Europe. If security concerns force shipping lines to reroute vessels away from these corridors, the consequences can be significant.

According to maritime analytics firm Clarksons Research, rerouting ships around the Cape of Good Hope, at the southern tip of Africa, adds between 10 and 14 days to delivery times. For retailers relying on rapid inventory turnover, such delays can quickly undermine the commercial viability of seasonal merchandise.

“Fashion supply chains rely heavily on predictable delivery schedules,” Haupt noted. "At the moment we are seeing slight delays, but if the situation continues for several weeks, we could see port congestion, cancellations and service changes.”

Such disruptions could ultimately affect what consumers see on store shelves. “In practical terms, delays could translate into stock shortages or postponed product launches,” he said.

Retailers operating across the Gulf region may therefore face a difficult balancing act between maintaining inventory levels and controlling rising logistics costs.

Air freight offers speed — at a steep price

Faced with the risk of shipping delays, some fashion brands are already exploring alternatives to maritime transport. Air freight offers a faster solution but comes with a significantly higher price tag. “Air cargo prices have gone up by roughly 300 to 400 percent,” Haupt said.

The surge reflects both increased demand and reduced airspace capacity across parts of the Middle East. Several Gulf countries — including the United Arab Emirates, Qatar, Bahrain and Kuwait — have temporarily restricted airspace or rerouted flights due to security concerns, according to operational updates published by shipping group Maersk.

Air freight is typically used for high-value or lightweight goods, making it a potential option for luxury fashion items or urgent replenishment shipments. However, it is rarely viable for large volumes of mass-market apparel.

“You pay per kilo with air freight,” Haupt explained. “For many goods, this is much more expensive than ocean transport.”

Some e-commerce platforms such as Shein and Temu rely heavily on air cargo for small parcel shipments, allowing them to maintain rapid delivery times even during logistics disruptions. Traditional fashion retailers, however, operate on different cost structures. For many of them, sustained reliance on air freight would quickly erode margins.

Rising logistics costs could reach the consumer

Shipping companies also warn that the broader cost of transporting goods is likely to increase if the crisis persists. Several factors are pushing logistics expenses higher, including rising fuel prices, increased insurance premiums and additional storage costs for containers stranded at alternative ports.

“We are seeing prices rise across the transportation sector,” Haupt said. “Insurance contracts have had to be renegotiated and bunker fuel prices have increased significantly.”

Maritime insurers have already introduced additional war-risk surcharges for vessels entering high-risk areas in the Gulf and the Red Sea, according to industry reports from Lloyd’s List.

For fashion retailers operating on already thin margins, these additional costs may ultimately filter down to the consumer. “I would assume that customers will have to expect rising prices for fashion products,” Haupt said.

Retail resilience on the ground: malls and consumer patterns

While supply chains face mounting pressure, early signals from major retail destinations in the Gulf suggest a more nuanced picture of consumer behaviour. In Doha, the Place Vendôme mall — one of the region’s luxury shopping landmarks — has reportedly remained “fully operational throughout the events of the past two weeks,” continuing to offer both retail and essential services.

According to the operator, overall footfall during Ramadan has remained steady, with only minor fluctuations compared to previous years, and is even “tracking in line with the same period last year with a 2 percent increase,” encouraging signs amid ongoing geopolitical uncertainty.

The mall’s statement underlined that although “there has been a slight shift in visitor patterns in light of the current regional context,” engagement from residents, families, and regular visitors has remained robust.

This relative stability reflects the complex customer mix in the Gulf. Before the current tensions, the GCC luxury market was recording solid growth: Chalhoub Group estimated the region’s personal luxury market at 12.5 billion dollars in 2023, with high-end fashion outstripping global averages.

Furthermore, retail spending across the GCC is forecast to rise toward 300 billion dollars by 2028, driven by demographic shifts and strong urban consumption. These figures suggest that domestic demand was already a critical pillar of the retail mix before the latest shocks.

However, analysts remain cautious: Bain & Company estimates that international tourists historically contribute roughly 50 percent to 60 percent of luxury sales in the region. Should travel restrictions persist, the loss of these flows—key to hubs like Dubai—could still exert downward pressure on overall performance.

Travel retail operators also exposed

While traditional malls face inventory challenges, the region's massive travel retail sector is equally on alert. Lagardère Travel Retail, a key operator in the Gulf’s duty-free hubs, is monitoring the situation closely.

“At this stage, it is still too early for us to accurately assess the potential impact of the current regional tensions on our operations. As the situation continues to evolve, we are closely monitoring developments across the region. Our absolute priority remains the safety and well-being of our teams on the ground, and we are in regular contact with our local teams to ensure they have the appropriate support.,” says Gaëtan Labardin, corporate communications & external affairs manager at Lagardère Travel Retail.

Beyond traditional retail, the crisis may also affect the region’s powerful travel-retail sector. The Gulf has emerged as one of the most powerful hubs for airport retail globally. In Dubai alone, duty-free sales exceeded 2.3 billion dollars in 2025, illustrating the scale and resilience of travel retail in the region.

Any sustained disruption to air travel, whether through reduced passenger traffic or logistical delays in product deliveries, could therefore have broader implications for the region’s retail ecosystem.

Shopping malls, another cornerstone of Gulf retail culture, may also feel the effects if supply chain disruptions prevent stores from replenishing new collections. For brands operating in a region where novelty and rapid product turnover are essential to maintaining consumer interest, inventory shortages could quickly dampen sales momentum.

A resilient but fragile system

Despite the uncertainty, logistics operators emphasise that global supply chains have become increasingly resilient after several years of disruption.

The shipping industry has navigated multiple crises in recent years, including the Covid-19 pandemic, the blockage of the Suez Canal by the Ever Given container ship in 2021 and escalating geopolitical tensions across several regions. “Our industry has experienced many crises over the last years,” Haupt said. "This industry is used to disruptions. But what we are currently seeing, a war involving several countries, is particularly tough.”

For retailers, the key variable remains time. If geopolitical tensions ease quickly, the disruptions may remain limited to temporary delays and cost increases. But if instability persists, the consequences could extend further along the supply chain — from delayed shipments and rising retail prices to reduced availability of goods in stores.

In an industry built on speed and precision, the events unfolding in the Middle East are a reminder that even the most sophisticated global supply chains remain vulnerable to geopolitical shocks. For fashion retailers dependent on constant product flows and carefully timed seasonal launches, the coming weeks may prove decisive.