US-China Trade War Hits Air Cargo Hard
The International Air Transport Association (IATA) has released new data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), contracted by 3.9% in August 2019, compared to the same period in 2018, marking the tenth consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008.
The decline has been blamed on the US-China Trade War than began in 2018.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2% year-on-year in August 2019, while capacity growth has now outstripped demand growth for the 16th consecutive month.
Air cargo continues to face strong headwinds from the intensifying trade war between the US and China, as well as weakness in some of the key economic indicators and rising political uncertainties worldwide. Global trade volumes are 1% lower than a year ago.
Trade in emerging countries has been underperforming that of advanced nations throughout most of 2019.
This is due to higher sensitivity of the emerging economies to trade tensions, rising political instability and sharp currency depreciation in some of the key emerging markets.
Global export orders also continue to fall.
Alexandre de Juniac, IATA's Director General and CEO, said: "The impact of the US-China trade war on air freight volumes was the clearest yet in August. Year-on-year demand fell by 3.9%.
“Not since the global financial crisis in 2008 has demand fallen for 10 consecutive months. This is deeply concerning and with no signs of a détente on trade, we can expect the tough business environment for air cargo to continue. Trade generates prosperity. Trade wars don't. That's something governments should not forget."
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