Global demand for air cargo grew 2.7 percent in June following increases of 4.2 percent in May and 5.2 percent in April.
Growth in global air freight volumes slowed for the second straight month in June after accelerating considerably in April.
Cargo demand grew 2.7 percent for the month compared with the same 2017 period, down from the 5.2 percent year-over-year growth rate seen in April and 4.2 percent uptick in May, but still up a full point from March’s 1.7 percent pace, according to the latest data from the International Air Transport Association. The March increase was also the slowest in 22 months.
Growth in available air freight capacity also slowed, from 6.2 percent in May to 4.1 percent in June, but still outpaced volume growth for the fifth consecutive month.
Through the first half of 2018, air freight volumes have grown 4.7 percent compared with the first six months of 2017, less than half of the full-year 2017 growth rate, according to IATA.
IATA attributed the recent slowdown primarily to the end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand, and a “structural slowdown in global trading conditions,” as well as the temporary grounding of Nippon Cargo Airlines’ fleet in the second half of June, which shaved as much as 0.5 percentage points off the June growth figures.
IATA Director General and CEO Alexandre de Juniac said the association is still projecting 4 percent growth in air cargo for the full year, but noted that could change due to growing downside risks, most notably in the form of the escalating tariff battle between the United States and several key trading partners like China, the European Union, Canada and Mexico.
“The deterioration in world trade is a real concern,” he said. “While air cargo is somewhat insulated from the current round of rising tariff barriers, an escalation of trade tension resulting in a ‘reshoring’ of production and consolidation of global supply chains would change the outlook significantly for the worse.
“Trade wars never produce winners,” added de Juniac. “Governments must remember that prosperity comes from boosting their trade, not barricading economies.”
Broken down by geographical region, five of the six areas tracked by IATA recorded increases in demand in June, but only two saw an acceleration in year-over-year growth rates.
Air freight volumes carried by Asia Pacific airlines climbed 1.5 percent for the month after growing 4.9 percent in May, while capacity grew 5.2 percent. IATA that because Asia accounts for roughly 37 percent of all global air cargo shipments, the regional slowdown was a major contributor to the overall decline in global growth.
European airlines saw freight volumes rise 3.3 percent in June, accelerating from the 2.3 percent gain the previous month, as capacity increased 5.4 percent year-over-year. Growth in European volumes facing headwinds from a slowdown in export orders, as well as an easing of supply chain bottlenecks that had previously contributed to a diversion of certain cargoes to other modes like air.
Carriers in North America saw shipments climb 3.8 percent year-over-year in April, slowing slightly from May’s 5.9 percent year-over-year growth rate. North America was one of only two regions in which capacity grew at a slower rate than demand, rising 3.4 percent for the month. IATA said a strong U.S. dollar and robust growth in the U.S. economy drove increased demand for imports in the region.
Cargo volumes carried by Middle Eastern airlines grew 3.8 percent for the month, up from the 2.4 percent uptick seen in May, while capacity increased 4.5 percent.
Latin American air freight carriers, meanwhile, saw monthly shipments rise 5.9 percent, down considerably from an 11.4 percent year-over-year boost the previous month, but still the largest increase of any of the six regions tracked by IATA and slightly ahead of the 5.7 percent increase in capacity in the region.
African airlines, on the other hand, saw cargo demand drop 8.5 percent from the same month a year ago after slipping 2 percent in May, while capacity fell 1.4 percent.
“It is difficult to be positive about the current picture in Africa,” IATA said. “International FTKs fell at the fastest pace (-8.6 percent) for nearly nine years. Although the year-on-year growth rate for the first half of 2018 was 3.0 percent, in seasonally-adjusted terms, FTKs are trending downward at an annualized rate of almost 20 percent over the past six months, and demand conditions are weak on all the main markets to and from the continent.”
Trade tensions dampen air freight
