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Cargo business rebounds on economic growth


Global air cargo demand weakened in 2018, pressured by a slowdown in freight volumes in the final months of the year.

Demand growth, measured in freight tonne kilometers (FTKs), grew 3.5% for the year, down sharply from the 9.7% growth rate recorded in 2017, according to IATA’s Air Freight Market Analysis. Analysts had expected a full-year growth rate of 4.1%.

IATA said the slowdown in freight demand partly reflected a typical pattern of the inventory restocking cycle, which was compounded by increasing headwinds from renewed signs of weakness in global trade, as evidenced by the new export orders component of the global manufacturing Purchasing Managers’ Index (PMI), which has fallen for nine of the last 12 months.

“Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds,” IATA DG and CEO Alexandre de Juniac said. “We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. But with the persistence of trade tensions and protectionist actions by some governments there is significant downside risk.”

Industry wide FTK growth ended the year on a weak note, with year-on-year (YOY) cargo volumes 0.5% lower for the month of December, the lowest annual growth rate since March 2016. That figure was dragged lower by Asian-Pacific carriers, which slipped 4.8% from the year-earlier period.

North American carriers were the strongest performers in December for the seventh month in a row with a 5% jump in international FTKs, led by a robust US economy which has supported consumer spending and low unemployment.

European carriers returned to a 2.2% growth rate in December following three consecutive months of slowing growth, although IATA said that reflects developments from late 2017, rather than any meaningful economic improvements in recent months.

Capacity growth rose 3.8% YOY in December, the tenth consecutive month in which annual capacity growth outpaced growth in demand. The industry-wide freight load factor was 2.1% lower from the year-earlier period as a result.

“To attract demand in new market segments, the air cargo industry must improve its value proposition. Enabling modern processes with digitalization will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables,” de Juniac said.



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