IATA releases the latest global air cargo regular data, global air cargo growth continues to slow in the first half of the year
According to the latest global air cargo regular data released by the International Air Transport Association (IATA), in June 2018, global air cargo demand (calculated in freight ton-kilometers) increased by 2.7% year-on-year. The increase in air cargo demand has slowed since the beginning of 2018. In the first half of 2018, global air cargo demand increased by 4.7%, and the growth rate was less than half of that in 2017.
In June 2018, freight capacity (according to available freight ton-kilometers) increased by 4.1%. Since March, capacity growth has exceeded demand growth every month.
The three main reasons for the slowdown in growth:
The inventory replenishment cycle for companies to meet demand by rapidly increasing inventory has ended in early 2018. Since March, air cargo traffic has decreased significantly.
The Purchasing Managers' Index (PMI) fell to its lowest level since 2016, indicating a current structural slowdown in global trade. Manufacturing export orders from China, Japan and the United States showed negative growth.
The temporary suspension of the Japanese cargo airline fleet in the second half of June led to a 0.5% drop in freight growth in June, and the slowdown was further aggravated.
Alexandre de Juniac, President and CEO of IATA, said: Air cargo is still struggling and the downside risks are increasing. Global air cargo demand is expected to grow by 4% this year, but the deterioration of world trade is really worrying. Although air cargo is not affected to some extent by the current intensified tariff barriers, increased trade tensions lead to a combination of production ‘return’ and global supply chain integration, which will make development prospects worse. A trade war will only lead to both losses. Governments must remember that prosperity comes from trade promotion rather than hindering economic development.
Air cargo market June-2018
Regional performance
In June 2018, except for Africa, the freight volume of airlines in all other regions increased year-on-year. The Asia-Pacific region, which accounts for nearly 37% of the entire air cargo market, is growing slowly, dragging down global growth rates.
Asia-Pacific Airlines' cargo demand in June 2018 increased by only 1.5% year-on-year. Capacity increased by 5.2%. International cargo demand in the region fell to its lowest level in 17 months (1.1%), in stark contrast to strong performance in June 2017. In the first half of 2018, freight demand increased by 4.6% year-on-year, and the average annual growth rate of freight volume is expected to reach 3-4%.
European airlines' cargo volume increased by 3.3% in June 2018. Capacity increased by 5.4%. Cargo growth was affected by the decline in export orders. The supply chain bottleneck is tempered by the impact of air cargo. In the first half of 2018, air cargo demand in the region increased by 4.1% year-on-year.
North American Airlines' cargo volume in June 2018 increased by 3.8% year-on-year. International freight demand grew by 5.9%, making the region the strongest market for the first time in nearly two years. A stronger US dollar and the US economy will help boost import shipments. Capacity increased by 3.4%. In the first half of 2018, air cargo demand in the region increased by 5.3%, ranking only second in Latin America, where cargo demand has risen sharply.
Middle East Airlines' cargo volume increased by 3.8% in June 2018, up from last month's level (2.7%), but still far below the average growth rate of the past five years (9.5%). Capacity increased by 4.5%. In the first half of 2018, freight demand increased by 4.3% year-on-year, and it is expected that cargo volume will continue to grow steadily in the coming months.
Latin American Airlines' cargo demand increased by 5.9% in June 2018, maintaining its recent growth in other regions. The capacity dropped unusually by 5.7%. The increase in international freight demand (5.2%) was lower than last month, but still much higher than the average of the past five years (1.6%). In the first half of 2018, freight demand in the region increased by 10.1%, which was the best in all regions.
African airlines' cargo demand in June 2018 fell by 8.5% year-on-year. Capacity also fell by 1.4%. The status quo in the African region is not optimistic. International cargo traffic fell by the largest decline in the past nine years (-8.6%). Although cargo demand growth in the first half of 2018 was 3.0% year-on-year, seasonally adjusted freight rates have declined at an average annual rate of nearly 20% in the past six months, and all major market demand to and from the African continent has been weak.
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