Good day,
At least for July, air cargo volume declines seem to have stabilized. According to WorldACD market data, air cargo chargeable weight in July fell 4.2 percent, but increased 5.1 percent month-over-month. Special cargo increased 3.5 percent, the group said.
“When it comes to year-over-year [YoY] comparisons for the first seven months of this dismal year for air cargo, July 2019 distinguished itself in a relatively positive way. The month showed one of the smaller YoY decreases since January, when the world still looked reasonably okay. Following the deep drop in June (-8.9 percent YoY in kilograms), July seemingly marked quite an improvement (-4.2 percent YoY),” WorldACD said.
However, the group cautioned that July’s performance may have been closer to June’s than it first appears. It noted that June had five Sundays while July only had four. June also featured Whitsunday, a Christian holiday in England, that negatively affected volumes.
WorldACD noted that international relations and trade remain concerns for air cargo operators.
“Upheaval in international relations has been the order of the day this year. And even though the worst effects of the U.S.-instigated trade war(s) may still have to reach air cargo, the general sentiment in the world is obviously not doing the industry a whole lot of good,” it said.
WorldACD notes that the increase in U.S. tariffs on China as of September 1 could cause upheaval in consumer goods air cargo.
Globally, only African revenues seem to be trending upward (1.3 percent). Asia Pacific and Europe are both down 10.9 percent. Brazil is off 18.1 percent while Germany is down 22.5 percent and Bangladesh is off 25.5 percent. The U.S. is down 6 percent year-over-year in outgoing revenue and down 8.5 percent in incoming revenue.
According to FreightWaves’ SONAR data (A4A Air Cargo Volume Revenue Ton Miles: AIRRTM.USA), air cargo volume revenue is below the previous two years at this time, and trending down since May 31, 2019. In 2016-2017, revenue per ton mile was $977,000 as of June 30, 2017, and in 2017-2018 it was $983,000 as of June 30, 2018. As of June 30, 2019, it was at $960,000, down from over $1 million at the end of May and off from its high of approximately $1.06 million at the end of 2018.
Did you know?
Researchers at McGill University in Canada have offered widely varying predictions in the potential increase in marine traffic, suggesting increases as low as 240 percent and as high as 1,209 percent by 2050.
Quotable:
“While it is legal in Minnesota (and every state in the U.S. except Hawaii and Alaska) for 18-year-olds to obtain a Commercial Driver’s License (CDL) and operate trucks in intrastate commerce, a federal rule prevents them from participating in interstate commerce. What this means in practice is that a 20-year-old Minnesotan can drive a truck 370 miles across the state from Rochester to International Falls and back – but she is legally barred from driving the single mile from Moorhead across the border into Fargo, North Dakota.”
– John Hausladen, president & CEO of the Minnesota Trucking Association, in an op-ed in the Minneapolis Star-Tribune on the need for changes to the CDL age restriction
In other news:
South African trucking group distances itself from strike
The largest truck drivers’ association in South Africa is distancing itself from a trucker’s strike that started on Monday, calling the organizers a bunch of criminals. (Business Day)
Logistics firms see value in rail
A group of logistics firms has purchased a 35 percent stake in Swiss Railways’ cargo unit, making a bet that ownership will help streamline operations and costs. (Reuters)
App helps ships avoid whale strikes
In an effort to reduce the number of whales killed by ships off the U.S. West Coast, researchers at NOAA Fisheries’ Southwest Fisheries Science Center have developed an app to identify locations of blue whales. (Geographical)
Changes to CDL rule are needed
In an op-ed in the Minneapolis Star-Tribune, John Hausladen, president & CEO of the Minnesota Trucking Association, lays out the case for allowing 18-year-olds to drive interstate. (Star-Tribune)
Tariff threats boosting West Coast ports
Tariff threats may cause disruption in the broader freight markets, but they continue to be a boon for West Coast ports. (Hellenic Shipping News)
Final Thoughts
The arrival to Hurricane Dorian has brought disruption to the freight industries. Much of this uncertainty has been due to the unpredictability of the storm – was it heading to Florida, the Carolinas, up the East Coast? Because of this, the ability of officials to determine where to place relief supplies such as water in areas ahead of the storm was more difficult. Following the storm, wherever it finally lands, freight operations, even for those not involved in relief operations, will face days if not weeks of disruption and potential spot rate spikes in some areas. That is why FreightWaves opened its SONAR data platform to any firm involved in freight for free until Friday, September 6, 2019. To take advantage of the insights available and navigate around Hurricane Dorian, sign up here: https://web.freightwaves.com/dorian-relief.
Hammer down everyone!