Cargo demand in November a "big disappointment", says IATA

08 / 01 / 2019

The air cargo industry failed to register an increase in demand in November for the first time since March 2016 in what has been described as a big disappointment.

The latest figures from airline association IATA show that cargo traffic was flat in November compared with a year earlier, following 31 consecutive months of year-on-year increases.

IATA said that while international e-commerce continues to grow, there were signs of weakness in global economic activity; export order books in all major exporting nations, apart from the US, contracted and consumer confidence is weaker than in 2018.

IATA director general and chief executive Alexandre de Juniac said: “Normally the fourth quarter is a peak season for air cargo, so essentially flat growth in November is a big disappointment.

“While our outlook is for 3.7% demand growth in 2019, downside risks are mounting. Trade tensions are cause for great concern.

“We need governments to focus on enabling growth through trade, not barricading their borders through punitive tariffs.”

Analyst WorldACD, meanwhile, reported that cargo volumes actually decreased by 1.4% year on year in November partly as a result of the ongoing trade war between the US and China. Demand was also down compared with October, it said.

WorldACD pointed out that the China-US trade lane registered a decrease of 5% and in the opposite direction there was an 8% slip.

IATA figures for November also show a capacity increase of 4.3% and as a result the freight load factor for the month shrank by 2.2 percentage points on last year to 51.5%.

Three of the six regions reported year-on-year demand growth in November 2018 – North America, Middle East and Latin America. Asia Pacific, Europe and Africa all contracted.  

Asia-Pacific airlines saw demand for airfreight shrink by 2.3% in November compared with 2017 levels.

“This was the first time since May 2016 that monthly year-on-year demand declined,” IATA said.

“Weaker manufacturing conditions for exporters and shorter supplier delivery times particularly in China impacted the demand. Capacity increased by 3.1%.”

North American airlines posted the fastest growth of any region for the second consecutive month in a row with an increase in demand of 3.1% year on year.

“The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers,” the association said.

European airlines experienced a contraction in freight demand of -0.2% on a year earlier as weaker manufacturing conditions for exporters, and shorter supplier delivery times particularly in Germany, one of Europe’s key export markets, hit demand. 

Middle Eastern airlines freight traffic, meanwhile, was up by 1.7% as seasonally-adjusted international air cargo demand has now increased for the past six months helped by stronger trade to/from Europe and Asia. 

Latin American airlines saw cargo traffic jump by 3.1% in November as “international year-to-date demand recovered into positive territory, increasing 6.3%”.

“The key markets, however, to and from the region are showing signs of weakness, particularly between South America and Europe, which contracted in year-on-year terms in October,” IATA added.

Finally, African carriers saw freight traffic decrease by 7.8% in November as demand conditions on all key markets to and from Africa “remain weak”.

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