Air cargo volumes have been hindered by sluggish global trade growth and the falling load factor is continuing to keep intense pressure on freight yields and revenues, according to the International Air Transport Association.
Global airfreight volumes fell 2 percent year-over-year in March 2016, and by a similar amount for the first quarter of 2016, according to the International Air Transport Association (IATA).
Since the start of 2016, airfreight volumes have been hindered by sluggish global trade growth. In addition, the results have been exaggerated by the comparison to a particularly strong start to 2015, when airfreight demand was much higher due to congestion issues at U.S. West Coast ports.
In March alone, available air cargo capacity rose 6.9 percent year-over-year. The falling load factor, which declined 4 percentage points from March 2015 to 43.5 percent, continues to keep intense pressure on freight yields and revenues, said IATA.
Asia Pacific and North American airfreight carriers, both of which enjoyed strong boosts to transpacific air freight at the time of the U.S. West Coast seaport disruption, saw March volumes drop 5.2 percent and 1.8 percent year-over-year, respectively.
Looking ahead, the comparative strength of the U.S. economy, along with the strong U.S. dollar, may spur inbound freight volumes for North American airfreight carriers throughout the rest of the year. However, the strong U.S. dollar is keeping exports under pressure, which could hinder outbound freight demand for these carriers, the association added.
Latin American airfreight carriers saw volumes decline 3.1 percent year-over-year in March.
“The hardest hit routes are those within South America, reflecting the region’s challenging economic environment, particularly in Brazil,” IATA said.
Meanwhile, volumes carried by African airfreight carriers during the month fell 3.1 percent from March 2015, while European airfreight carriers saw volumes inch up 1.3 percent.
Middle Eastern airfreight carriers experienced a 2.4 percent year-over-year increase in airfreight volumes in March, the slowest growth rate recorded since July 2009.
“This reflects both a slowdown in network expansion by the region’s main carriers over the past six months and weak trading conditions,” IATA said.
“It is shaping up to be another tough year for air cargo,” said IATA Director General and CEO Tony Tyler. “February 2016 world trade volumes were only 0.4 percent higher than at the end of 2014, and the expectations of purchasing managers gives little optimism for an early uptick. The combination of fierce competition, capacity increases and stagnant demand makes this a very difficult environment in which to generate profits.”
Overall, the Asia-Pacific makes up 38.9 percent of the total freight traffic market share, based on freight ton kilometers, followed by Europe at 22.3 percent, North America at 20.5 percent, the Middle East at 14 percent, Latin America at 2.8 percent and Africa at 1.5 percent.
IATA: Airfreight demand remains weak in March
