Air freight is becoming a costly fix for inventory issues

Insight summary

• •Air freight costs have increased due to jet fuel prices being nearly 46% higher than in 2025, influenced by the Iran war and higher oil prices.
• •Some brands, such as Capri (Michael Kors, Jimmy Choo), are using air freight to mitigate inventory shortages caused by port congestion and long transit times.
• •Capri reported a 25% year-over-year decline in Michael Kors inventory and a 7.1% revenue drop in Q1 2024, expecting inventory to remain low in Q2.
• •Air freight remains expensive due to ongoing geopolitical tensions and growing demand, with no quick relief expected in rates.
• •Figs is using air freight to overcome supplier disruptions caused by a U.S. Customs withhold release order affecting its Jordan supplier.
• •New U.S. tariffs on Canadian goods effective August 19 are prompting Canadian companies to consider relocating operations to avoid duties.
• •The U.S. government is contesting refunds related to unconstitutional IEEPA tariffs in ongoing legal challenges at the U.S. Court of Appeals.