Air Freight Costs Surge, But Brands Absorb the Hit for Faster Inventory

Retailers are increasingly turning to air freight as an expensive but necessary fix for inventory gaps caused by congested supply chains. While the higher transportation costs cut into margins, some brands are prioritizing speed over savings when merchandise is stuck in transit.

The International Air Transport Association reported that jet fuel prices remain nearly 46% above levels from 2025, before the war in Iran drove oil and fuel costs sharply higher. Those fuel increases have directly pushed up air freight rates, making expedited shipping significantly more expensive.

Capri, the parent company of Michael Kors and Jimmy Choo, has seen a 25% year-over-year decline in Michael Kors inventory, according to its first-quarter earnings call. Part of the drop stems from a deliberate strategy to reduce markdowns and clearance merchandise, but the company also blamed longer transit times from congestion at Asian ports for delays in full-priced inventory.

Rather than accept empty shelves, Capri is absorbing the higher air freight costs to get products into stores faster. Executives acknowledged the premium but said the speed is worth the expense in these exceptional circumstances.

Figs, a medical apparel brand, is similarly willing to swallow the added logistics costs when unexpected inventory crunches arise, according to the earnings calls. The approach reflects a broader shift among retailers that are weighing the trade-off between shipping expenses and lost sales from stockouts.