Hindered by weak world trade and increasing capacity, demand for air cargo remains soft, lagging behind “relatively robust” growth on the passenger side, according to the International Air Transport Association.
Global airfreight volumes grew 3.2 percent year-over-year in April 2016, according to recent data from the International Air Transport Association (IATA).
Hindered by “weak” world trade and increasing capacity, demand for air cargo remains soft, lagging behind “relatively robust” growth on the passenger side, said IATA.
The April demand increase was broad-based across all regions with the exception of Latin America, with the strongest growth occurring in the Middle East and Europe, up 7.7 percent and 6.8 percent, respectively, compared with the same 2015 period.
Volumes at Latin American declined 5.9 percent despite a 0.7 percent drop in capacity as economic conditions continued to worsen, particularly in Brazil, the region’s largest economy.
Asia Pacific airfreight carriers saw April volumes inch up 0.1 percent compared with last year due primarily to weak trade volumes both globally and in the region.
North American carriers saw volumes grow 4 percent year-over-year “as the exaggerated effects of last year’s U.S. seaport disruption wore off.” Some shippers diverted cargoes to other modes, including air, during contentious dockworker contract negotiations early in 2015 that caused congestion issues up and down the U.S. West Coast and snarled supply chains in the process.
Growth was relatively flat for African airlines compared to the same period last year. Carrier capacity, however, surged 24.3 percent year-over-year, more than double the pace of any other region in recent months.
“While growth appears to be stronger than in the preceding months of 2016, this is largely due to the disappearance from the comparison data of distorting factors associated with the 2015 strike at seaports on the US West Coast,” IATA noted.
Available airfreight capacity increased 6.6 percent for the month compared with April 2015, keeping pressure on yields.
“Overall, the demand for air cargo remains soft and lags behind the relatively robust growth on the passenger side of the business,” said IATA. “This is largely driven by weak world trade. The first quarter of 2016 saw the first annual decline in trade volumes since the global financial crisis in 2009, and the World Trade Organization (WTO) predicts only sluggish growth for the remainder of 2016.”
“While the April uptick in demand growth for air cargo is encouraging, the overall economic environment is not. The decline in global trade does not bode well for air cargo markets in the months ahead,” added IATA Director General and CEO Tony Tyler.
IATA: Airfreight volumes tick up in April
