Global freight volumes register 2.3% upturn in August – IATA
Buoyant consumer confidence, an upturn in the global investment cycle and growing international e-commerce pushed global air freight demand, measured in freight tonne kilometers (FTKs), by 2.3% this August versus the same period in 2017, according to the latest data from the International Air Transport Association (IATA).
This pace of growth was unchanged from the previous month but was less than half the five-year average growth rate of 5.1%.
Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 4.5% year-on-year in August 2018, the sixth month in a row that capacity growth outstripped demand growth. Yields, however, appear to be holding up.
Nevertheless, a broad-based weakening in manufacturing firms’ export order books, specifically, export order books in Europe, China, Japan and Korea have fallen in recent months.
Manufacturers in Asia and Europe, the top two global trading areas by volume are also reporting longer supplier delivery times This typically means that they have less need for the speed afforded by air freight.
Furthermore, increasing trade tension is threatening global trade.
“August demand for air cargo grew at 2.3%, unchanged from the previous month. Consumer confidence, the growth of international e-commerce and the broad-based global economic upturn are behind the growth,” Alexandre de Juniac, IATA's Director General and CEO explained.
“But there are downside risks. Order books are weakening and supply delivery times are lengthening. And the growing trade tensions are a specter over the industry," he warned.
"The early focus of tariffs was not on products typically carried by air. But as the list of tariffs grows so does the air cargo industry’s vulnerability. We can expect souring trading relations to eventually impact business travel. There are no winners in trade wars.”
All regions reported year-on-year demand growth in August 2018, except Africa which contracted. All regions reported that capacity growth exceeded growth in demand.
Asia-Pacific airlines saw demand for air freight grow by 1.6% in August 2018 compared to the same period last year. This was an increase over the previous month but a marked slowdown in growth from the past year.
Weaker manufacturing conditions for exporters, particularly in Japan and China, have impacted the demand. As the largest freight-flying region, carrying more than one-third of the total, the risks from protectionist measures are disproportionately high. Capacity increased by 3.4%.
Middle Eastern carriers’ carriers posted a 2.2% increase in freight volumes in August 2018 compared to the same period last year. This was a significant deceleration in demand over the 5.4% recorded the previous month.
The decrease mainly reflects developments from a year ago rather than a substantive change in the near-term trend. International cargo demand is trending upwards at an annualized rate of 6% in the region supported by a pickup in trade to/from Europe and Asia. Capacity increased 7.9% year-on-year.
North American airlines’ freight volumes expanded 2.8% in August 2018 compared to the same period a year earlier. Capacity increased by 3.2% over the same period.
The recent momentum of the US economy and solid trade flows across the Atlantic have helped strengthen demand for air cargo, benefiting US carriers. A pick-up in supply chain bottlenecks, which is typically alleviated by the speed of air freight, may also be benefiting the demand.
Latin American airlines experienced an increase in freight demand growth in August 2018 of 1.6% compared to the same period last year and capacity increased by 5.3%. (EVA)