Global airfreight demand grew at its fastest pace in 18 months thanks primarily to the August bankruptcy announcement by South Korean ocean carrier Hanjin Shipping, as well as some last-minute shipping resulting from higher-than-expected order levels.
Global airfreight volumes in October 2016 rose 8.2 percent compared with the same 2015 period, the largest increase in 18 months, according to the most recent data from the International Air Transport Association (IATA).
Available airfreight capacity rose 3.6 percent year-over-year for the month, while load factors remained historically low, keeping yields under pressure.
The sharp growth in airfreight volumes during the month from a year prior coincided with a turnaround in new export orders in recent months, the IATA said.
Growth may also relate to one-off factors, including the boost in air traffic following the sudden collapse of South Korean liner carrier Hanjin Shipping at the end of August, along with the rushed replacement of the Galaxy Note 7 devices during the month.
IATA attributed the strong October figures primarily to “one-off factors,” including the sudden collapse of South Korean ocean carrier Hanjin Shipping in August and some last-minute air cargo shipping resulting from higher-than-expected order levels.
“Global air freight markets look set to end 2016 on a high note,” IATA Director General and CEO Alexandre de Juniac said. “It remains to be seen how long this growth trend will endure after the year-end peak period and we still face headwinds from weak global trade. But there are some encouraging signs.
“The peak has been stronger than expected. And purchasing managers are reporting a pick-up in new export orders. So we will enter 2017 propelled by some much-needed positive momentum,” he said.
Some structural shifts in the overall shipping market, such as strong growth in cross-border e-commerce and pharmaceutical volumes, are also likely contributing to growth in airfreight demand, according to IATA. Preparation for the increasing popularity of sales events such as Black Friday and Cyber Monday may also have contributed to the increased peak in demand.
“The drivers of stronger growth are sending a major signal for change to the air cargo industry, said de Juniac. “Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to e-freight is more critical than ever.”
On a regional level, all of the regions tracked by IATA showed year-over-year growth in October with the exception of Latin America.
Asia Pacific airfreight carriers saw demand rise 7.8 percent for the month, while international shipments were up 8 percent compared with the previous year.
At 13.4 percent, European airlines posted the largest year-over-year increase in regional demand for October, corresponding with an increase in reported new export orders in Germany during the last few months and the ongoing weakness of the euro compared with other foreign currencies. International airfreight volumes jumped 13.2 percent in Europe, the fastest growth rate for the region since April 2011.
North American airfreight carriers saw demand and international volumes grow 3.7 percent and 7.2 percent, respectively, in October from a year prior, the fastest pace since the West Coast U.S. port slowdown in February 2015. IATA noted the strong U.S. dollar continues to keep the U.S. export market under pressure.
Middle Eastern airfreight saw demand grow 9.2 percent from a year earlier, while African airlines experienced a 7.4 percent year-over-year increase in demand.
Latin American airfreight carriers, on the other hand, saw demand slip 0.1 percent from a year earlier despite a 0.2 percent increase in international volumes. Regional demand continues to be held down by weak economic and political conditions, particularly in Brazil, Latin America’s largest economy, according to IATA.
IATA: Airfreight volumes jump 8.2% in October
