First look at June

As we enter the second half of 2015, the question on most minds in the air freight industry is “What is happening to demand growth?”

The year started extremely strongly, but the double-digit year-over-year growth reported by many carriers and airports was driven by the one-time impacts of the port workers slowdown on the US west coast, and a huge automobile recall in the US. As the impact of those events gradually diminished, so too did the growth in demand, to the point that IATA reported overall May cargo traffic up just 2.1% y-o-y.

It will be another two weeks before we have enough evidence to know with any certainty what happened in June, but here is the first report from a significant player.

Shanghai’s Pudong Airport (PVG) is one of the world’s busiest cargo airports, and Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl, the biggest cargo handler at PVG) is almost always the first major air cargo player to report its handle for the previous month. June was no exception, and if the news from Pactl is any indicator, June will be neither exceptionally good, nor exceptionally bad.

Pactl reported its June handle up 7.2% y-o-y to 130,000 tonnes. International volume was up 6.2% to 121,000 tonnes, while the much smaller domestic volume jumped 24.3% to 9,000 tonnes. For the first half of 2015, Pactl’s handle was up 10.9% to 762,000 tonnes.

Year-over-year growth of more than 7% worldwide would be fantastic news, but cargo volume growth at Pactl has been outperforming the industry for most of the year, so a more realistic expectation is modest growth – somewhere between 2% and 4%. But the report of strong growth from one of the world’s biggest handlers is good news nonetheless.