Air Cargo Demand - Light at the End of the Tunnel?

‘Up-and Down’ - that’s maybe the best way to describe developments in the air cargo industry during the first six months of 2016.
One crisis followed another, be it in the Far East, America or Europe and these global economic and political shifts left air cargo carriers, shippers and agents with the uncertainty of what 2016 would bring.
Luckily, a moderate fuel price helped many carriers to hold results somewhere near a break-even level. On the other hand, some were not so lucky and continued down the road with bad results.

August and September figures moving upwards
Will it all change for the better by the end of the year?
No, most probably not - but it really seems that better second half or even last quarter results can be expected.
Trends are certainly encouraging but by no means to be seen as a positive turnaround for the industry.

The recent figures released by IATA and WorldACD show an upward swing compared to last year.
It is interesting to note that ACD points out the disparity between their and IATA’s figures in that IATA shows results based on Freight Tonne Kilometers (FTK) and ACD on actual kilograms moved.
The ACD figure it seems is more realistic in terms of what they term as “knowing the amount of goods transported.“

Gratifying figures - or crystal ball gazing?
July had shown an almost 2% increase on 2015 and August figures moved past that to rise further compared to the same period last year.
Trends for September, although no firm percentages are on hand, leave us to believe that it will be an even better month than August was.
This applies especially to preliminary figures of Chinese carriers which indicate between 5.5% and 6.5% more tonnage uplift. PACTL Shanghai handling tonnages are said to have risen by almost 5.5% during September.
Moving over to Europe, one could argue that September also shows signs of being a good month.
Frankfurt and London Heathrow will probably report cargo handling increases of around 6% each for the month.

Latin America continues dropping
Cargo growth in both areas continues to stagnate especially within South American countries such as Brazil and Argentina.
This was apparent in the figures issued by IATA for the month of August.
They show that (based on FTK’s) there was a 3.9% year-on-year increase worldwide, whereby international air cargo which accounts for almost 90% of all movements, being up by 3.5%.
Europe, according to the IATA figures, was the monthly winner with an exceptional 6.6% rise whereby their Middle East  competitors only achieved a 1.8% increase.

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Could it be that European carriers are winning back market share?
North America jumped up 5.5% and even Africa bounced back somewhat with a plus 3.7%.
Despite the ever growing capacity influx, the Asia/Pacific air cargo flow also grew by almost 3%.
Latin America soured the milk by coming in with a minus 3.3% downwards trend.
However, all in all, the 3.9% global rise is something we’ve not seen for a long time and hopefully leads us to believe that it can only get even better by the end of the year.

The world has become an even more volatile place and economic and political uncertainties will continue to dominate the trends in world trade.
There is much to be afraid of out there and we’ll surely have to live with economic uncertainty for quite some time to come.

Think positive until the end of the year and take 2017 in our stride!

John Mc Donagh

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