Israel’s Airspace Closure Disrupts Supply Chains: How AI Helps Retailers Adapt

Israel’s abrupt airspace closure amid escalating security concerns is sending shockwaves through regional and global supply chains. With all inbound and outbound flights grounded indefinitely, companies that depend on air cargo for rapid inventory turnover now face mounting challenges — especially in retail, food, and pharmaceutical sectors.

“This isn’t just a local disruption,” says Pini Usha, CEO of Buffers.ai, an inventory optimization platform used by multinationals like P&G, H&M, Toshiba, and by critical Israeli infrastructure providers like the national electric company. “It’s a bottleneck event that’s triggering ripple effects across supply chains with no clear end date.”

According to Usha, the most immediate impact is on time-sensitive goods, such as imported dairy products. “Items with a short shelf life — like imported cheeses, milk-based desserts, and some refrigerated pharmaceuticals — are at the highest risk of running out. You can’t reroute those over land or sea without major spoilage or delays.”

While essential retailers like pharmacies remain open, foot traffic has dropped sharply due to the broader shutdown of public spaces, including shopping malls. As a result, demand in certain categories — like fashion — has slowed alongside supply, creating a lagging disruption that may surface in the weeks ahead. “In fashion and non-critical retail, the inventory challenge is delayed because stores are closed and consumer demand is subdued,” Usha notes. “But once the airspace reopens, retailers will face a new kind of pressure: restocking fast enough to match the rebound in shopping activity.”

Some companies have already begun exploring alternative shipping methods, but the switch is neither instant nor seamless. Ocean freight takes weeks to arrive, and land routes often involve complex customs coordination and security constraints. “We’re seeing clients shift to sea or local suppliers where possible,” Usha says. “But it’s not plug-and-play. These are strategic adjustments that require time and come with cost trade-offs.”

Inventory optimization platforms like Buffers.ai enable retailers to adjust assortment and replenishment processes across thousands of SKUs in real time—helping them avoid stockouts where possible while operating with minimal inventory. This balance between agility and efficiency is crucial for maintaining capital discipline in times of uncertainty. The platform plays a critical role in helping retailers and government-linked suppliers stay ahead of the curve. For example, Israel’s Electric Corporation, which also uses Buffers.ai, is required under government regulation to maintain dual sourcing for every item — with at least one supplier based in Israel.

“That kind of policy — having an Israeli backup supplier — is suddenly proving critical,” Usha says. “But not all sectors are set up that way, especially in consumer retail.”

As inventories shrink, companies may also begin pulling back on promotional activity. “One clear indicator of stress will be the disappearance of discounts and promotions,” Usha warns. “Retailers will try to preserve stock by slowing down the rate of sales. It’s not something consumers notice at first — until favorite items start disappearing from the shelves.”

Whether this disruption turns into a full-scale supply crisis depends heavily on how long Israeli skies remain closed. For now, technology and real-time decision-making tools like Buffers.ai are helping companies adapt dynamically, but the margin for error is narrowing fast.

“We built Buffers.ai for volatility like this,” Usha says. “It uses real-time sales and demand signals to continuously adjust inventory decisions. But no algorithm can replace planes in the air.”

With every day that flights remain grounded, pressure builds across the supply chain. Retailers, suppliers, and policymakers alike are entering a period of logistical improvisation — and Israeli consumers may soon see the results reflected directly in their carts.