Air cargo demand grows by double digits for 6th month

The global air cargo market showed double-digit growth in demand for the sixth consecutive month in May. Total demand, measured in cargo tonne kilometers (CTK), rose 14.7% year over year in May and rose 15.5% YoY for international operations, according to data released this week by IATA . Capacity, measured in available CTKs, increased 6.7% YoY and 10.2% YoY for international operations. “Air cargo demand moved sharply upwards in May across all regions,” IATA Director General Willie Walsh said in the release. “The sector benefited from trade growth, booming e-commerce and capacity constraints on maritime shipping.” The release highlighted the following operating environment factors: May’s Purchasing Managers’ Index (PMI) for global manufacturing output and new export orders were 52.6 and 50.4, respectively. A PMI above 50 indicates growth. Industrial production grew 0.5% month over month in May and cross-border trade increased 1.5% MoM. Inflation saw a mixed picture in April. In the EU and Japan, inflation rates fell to 2.7% and 2.8%. respectively, while rising in the U.S. to 3.3%. In contrast, China’s inflation rate remained near zero at 0.3%, reflecting weak domestic demand due to high unemployment, slow income growth and a crisis in the real estate sector, a trend that has persisted since 2023. Outlook “The outlook remains largely positive with purchasing managers showing expectations for future growth,” Walsh said. “Some dampening, however, could come as the U.S. imposes stricter conditions on e-commerce deliveries from China.” U.S. Customs and Border Protection (CBP) in June suspended several customs brokers from importing goods to the U.S. due to noncompliance with a new regulation requiring importers to declare goods under the de minimis policy prior to arrival. Chinese e-tailers Temu and Shein were among those affected. A shipment is categorized as de minimis when the value of the goods does not exceed $800, making it exempt from duty taxes, according to CBP. U.S. regulators are also looking to lower the de minimis threshold , or even do away with it entirely for some countries. “Increased costs and transit times for shipments under $800 may deter U.S. consumers and pose significant challenges for growth on the Asia-North America trade lane — the world’s biggest,” Walsh said. [caption id="attachment_57143907" align="alignnone" width="1344"] (Courtesy/IATA)[/caption] Asia Pacific Asia-Pacific airlines saw 17.8% YoY growth in demand in May. Demand grew by: 40.6% YoY on the Africa-Asia trade lane; 20.4% YoY on the Europe-Asia trade lane; 19.2% YoY within Asia; and 18.6% YoY on the Middle East-Asia trade lane; Capacity increased 8.4% YoY in May. North America North American carriers saw demand grow 8.7% YoY in May — the weakest growth among all regions. Demand on the Asia-North America trade lane grew 12% YoY and demand on the North America-Europe lane grew 8.9% YoY, the largest demand growth for this trade lane since mid-2022. May capacity increased 2.5% YoY. Europe European carriers saw demand grow 17.2% YoY. Intra-European air cargo demand rose 25.6% YoY, the fifth consecutive month of double-digit annual growth. Europe-Middle East routes saw demand increase 33.8% YoY. Capacity increased 11.9% YoY. Middle East Middle Eastern carriers saw demand grow 15.3% YoY in May. Middle East-Asia demand grew 18.6% YoY. Capacity increased 2.7% YoY. Latin America Latin American carriers saw 12.7% YoY demand growth and capacity increased 8% YoY. Africa African airlines saw air cargo demand grow 18.4% YoY — the strongest May growth of all the regions. The 40.6% YoY demand increase in the Africa-Asia market was the strongest performance of all the trade lanes. May capacity increased by 21.4% YoY.

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