IATA predicts cargo growth in 2013
After two years of declining air cargo traffic, the International Air Transport Association is predicting a turnaround in 2013. The predicted growth is not huge, and the prediction comes with a couple of caveats, but the prediction of 2.7% growth is almost double the Association’s earlier prediction of a modest 1.4% gain and reflects IATA’s increasing confidence. Of course, 2.7% annual growth is relatively modest compared with the 5% to 6% that was once considered normal, but the last decade has been anything but normal, and 2.7% growth in 2013 would put worldwide cargo traffic slightly above the previous highpoint in 2010.
[Growth prospects for the industry will be a subject of much discussion at the upcoming Cargo Facts Asia event in Hong Kong 16 – 17 April, and we invite you to join us there. To register, or for more information, click here.]
To back up its prediction, IATA today published its summary of cargo traffic in February, and, more importantly, for the combined January/February period. Obviously, given the timing of the Chinese New Year holiday in 2012 and 2013, plus that fact that February had an extra day in 2012, traffic for February 2013 was down, particularly for Asian carriers. But IATA says the worldwide total market decline of 6.2% y-o-y “masks modest cargo improvement,” due to the skewing effect of the two above-mentioned factors. What does “modest improvement” mean? According to IATA, “adjusting for these abnormalities, air cargo was actually up 2% in February compared to the previous year.”
For the combined January/February period, total cargo traffic was flat with 2012. This removes the effect of the New Year Holiday, although it is still impacted by the extra day in 2012. But IATA stills views the results as positive, saying: “February’s air cargo performance has sustained the weak recovery that began in the fourth quarter of 2012. This is welcome news after two consecutive years of contraction. It is even better news that this growth is expected to pick up moderately as the year progresses.”
It is in the last sentence, however, that the caveats come into play.
- First, and of more immediate importance, IATA bases its growth forecast on there being no worsening of the Eurozone crisis, because “any resulting loss of business confidence could shift the outlook for the worse.” IATA believes that sustainable recovery is underway in North America and Asia, but the recent events in Cyprus “have reminded us that the Eurozone crisis is far from over.”
- Second, and more of long-term than immediate concern, is IATA’s belief that the air freight industry must up its game if it wants to avoid continued modal shift to ocean. Clearly, airplanes cannot fly faster, and airport-to-airport service is not going to improve. But unless door-to-door service improves, an increasingly efficient ocean freight industry will continue to attract business away from the airlines. The immediate answer, says IATA, is acceleration of the adoption of e-freight. Going paperless “would boost the competitiveness of air cargo with more efficient processing and faster deliveries. More efficient connectivity in turn will foster economic growth.” But IATA’s Director General and CEO Tony Tyler said that however much the aviation industry wants to modernize its business practices, “We need governments, regulators and customs authorities on board, too. The e-Freight system cannot happen while regulators insist on seeing paper copies of documents.”
