Middle East grows twice as fast as other regions
According to the latest freight market figures released by the International Air Transport Association (IATA), in terms of demand measured in freight tonne kilometers (FTKs), Middle Eastern carriers posted the fastest growth of any region in September 2018, with an increase of 6.6% compared to the same period a year earlier.
This was more than double the pace of growth of other regions.
Meanwhile, global demand rose 2.0% in September 2018, compared to the same period the year before.
The global pace of growth however, was relatively unchanged from the previous month but was less than half the five-year average growth rate of 5.1%.
There are tentative signs of a pick-up in seasonally adjusted air cargo demand supported by more trade to/from Europe and Asia. Capacity grew 7.7% year-on-year.
Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 3.2% year-on-year in September 2018. This was the seventh month in a row that capacity growth outstripped demand. Yields, however, appear to be holding up.
The weak growth is being supported by strong consumer confidence, a robust global investment environment and the expansion of international e-commerce. The air cargo sector is, however, being weighed down by a softening of key demand drivers:
There has been a global contraction in manufacturing firms’ export order books – the first since June 2017. Specifically, export order books contracted in all the world’s major exporting nations in September with the exception of the USA.
Longer supplier delivery times are being reported by manufacturers in most of Asia and Europe, the top two global trading areas by volume. This typically means that they have less need for the speed afforded by air freight.
Alexandre de Juniac, IATA's Director General and CEO: “Demand for air cargo grew 2% in September—well below the five year average of 5.1%.
“Weakening order books and longer delivery times are undercutting the need for air freight in many traditional markets. But there is also some positive news. For example, strong consumer confidence goes hand-in-hand with expanding international e-commerce trade to give air cargo a boost.
“The bigger message for the sector is the need to modernize processes.
“There is some progress with the electronic air waybill becoming the default document on enabled trade lanes from 2019.
“But there is much more that must be done with governments and the supply chain to bring air cargo processes into the modern era.”
Read More: Global Air Freight Continues Upward Trend