Air freight growth continued on a modest upward trend in August, according to the latest data from the International Air Transport Association (IATA).
Demand rose 2.3% in August 2018, compared to the same period the year before while the pace of growth was unchanged from the previous month but was less than half
the five-year average growth rate of 5.1%.
Freight capacity, meanwhile, grew by 4.5% year-on-year in August. This was the sixth month in a row that capacity growth outstripped demand growth.
Yields, however, appear to be holding up.
IATA said growth is being supported by a number of factors, including buoyant consumer confidence, an upturn in the global investment cycle and growing international e-commerce.
However, demand is being negatively impacted by three factors:
• A broad-based weakening in manufacturing firms’ export order books. Specifically, export order books in Europe, China, Japan and Korea have fallen in recent months.
• Longer supplier delivery times are being reported by manufacturers in 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.
• Risks to global trade from the recent escalation in trade tensions.
Alexandre de Juniac, IATA's Director General and CEO, said: “August demand for air cargo grew at 2.3%, unchanged from the previous month. Buoyant consumer confidence, the growth of international e-commerce and the broad-based global economic upturn are behind the growth.
But there are downside risks. Order books are weakening and supply delivery times are lengthening. And the growing trade tensions are a spectre over the industry. The early focus of tariffs was not on products typically carried by air. But as the list of tariffs grows so does the air cargo industry’s vulnerability.
And, we can expect souring trading relations to eventually impact business travel. There are no winners in trade wars,” .
All regions reported year-on-year demand growth in August 2018, except Africa which contracted. All regions reported that capacity growth exceeded growth in demand in all regions of the world.
More in-depth analysis of the new data from IATA is available here