Air cargo up 11% in July, but signs that growth may have peaked

Air cargo traffic increased again in July, compared with a year earlier, but airline organisation IATA has warned that there are a growing number of signs that improvements may have peaked.
In total, air cargo traffic in freight tonne km terms increased by 11.4% year on year in July, while supply was up by the lower amount of 3.7%. As a result, cargo load factors reached 43.7% against 41.3% last year.
These growth figures mirrors those reported by WorldACD late last week, which show an 11.8% rise in July.
The growth rate is more than four times higher than the 10-year average of 3.1%, while it is the fourth time in five months that a double-digit percentage improvement has been registered.
IATA said that the robust growth in air cargo demand is consistent with an uptick in global trade, rising export orders and upbeat business confidence indicators.
However, the new export orders component of the PMI Index has tracked sideways over recent months, which IATA said is consistent with a moderation in cargo growth towards the end of the year.
“Seasonally-adjusted air freight volumes were flat in June and fell in July; and the global inventory-to-sales ratio has stabilised," IATA said.
“Air cargo often sees a boost in demand at the beginning of an economic upturn as companies look to restock inventories quickly. This tapers as inventories are adjusted to new demand levels.”
IATA director general and chief executive  Alexandre de Juniac added: “July was a strong month for air cargo with double-digit growth.
“And for the third consecutive month demand for airfreight grew at a faster pace than demand for air travel. While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak.”
Looking at the various regions, Asia-Pacific airlines’ freight traffic grew 11% in July, while capacity increased by 6.3%. Demand growth was robust on all the major routes to, from and within the region.
North American carriers posted an increase in freight volumes of 11.9% during the month and a capacity increase of 1.1%.
“The strength of the US dollar has boosted the inbound freight market over the past few years,” IATA said.
“However, the decline in the US dollar since the start of the year is likely to help rebalance trade flows.”
At European airlines there was a 12.1% in demand in July 2017 and a capacity increase of 5.5%.
“Double-digit growth in international demand has now been recorded in nine out of the past eleven months bolstered by strong demand on the Europe-Asia market.”
Export orders remain strong while the recent strengthening of the euro may begin to weigh upon the region’s exporters.
At Middle Eastern carriers there was a 9.3% improvement in traffic during the month. However, IATA said that amid strong competition from other region’s carriers, particularly on the Asia-Europe route, the Middle East carriers are not seeing as strong a pickup in the seasonally adjusted traffic trend as other region’s carriers.
Latin American airlines experienced a growth in demand of 5.8% in July, while capacity increased by 4.7% over the same period.
Finally, African carriers posted the largest year-on-year increase in demand of all regions, with freight volumes growing 33.7% − the second fastest monthly rise in seven years – boosted by demand on lanes to and from Asia.
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