August cargo volumes still growing, but at a slower pace

In our first look at August results, we noted many of the world’s big carriers, handlers, and airports reported stronger cargo demand for August. With results now rolling in from industry organizations, there is a notable discrepancy regarding the exact pace of year-over-year air cargo demand growth during August, but organizations agree that growth is still on track with July levels.

While the International Air Transport Association (IATA) reported y-o-y growth of 2.3% measured in freight tonne kilometers (FTKs), WorldACD reported only a 0.6% increase in cargo volumes for the month, and a 1.6% increase in direct tonne kilometers. Figures from IATA and WorldACD are mostly in line with July growth levels reported by the respective organizations.

According to IATA, a number of positive factors are continuing to support demand growth, including high levels of consumer confidence, improvement in the global investment cycle, and ongoing growth in cross-border e-commerce. However, August growth levels still fall well below the five-year average rate of 5.1% for a number of reasons, including: weakening export order books from manufacturing firms, lengthening supplier delivery times, and escalating trade tensions.

At US$1.89 per kg, yields also continued to increase, although as with cargo traffic, growth has slowed. WorldACD reported a 10.2% increase in yields from August 2017 (13% in euros), with the highest yield growth reported for cargo ex-Asia Pacific and Latin America.

To take a look at some other regional highlights, IATA reported the strongest y-o-y growth in total FTKs among European airlines, which saw traffic increase by 3.7%. North American carriers’ traffic increased by 2.8%, while Middle Eastern carriers were in third at 2.2%. The only region to contract during the month was Africa, where carriers saw traffic decline by 7.1% y-o-y in August.

WorldACD reported a similar decline in volumes ex-Africa, at 7.1%. However, WorldACD also noted declines ex-Europe, as well as from the Middle East and South Asia. Meanwhile, volumes increased the most from Central and South America, with WorldACD reporting an 8.8% y-o-y uptick in volumes during August. Among destinations, WorldACD noted that volumes destined for Europe are still increasing the fastest, at 2.8% growth for August.

Why such a large discrepancy in figures reported by the two organizations? In a note addressing discrepancies between the organizations’ August calculations for India’s air cargo traffic, WorldACD noted the differences in how data is collected, with WorldACD using information from air waybills, while IATA receives operational figures from member airlines. The differences in data collection likely lead to differences in how overall cargo traffic is measured, as well as differences in how regional performance is reported.

Learn more about trends in air freight 10-12 October at  Cargo Facts Symposium, where a roundtable panel discussion will be dedicated to the topic. For more information, or to register, visit www.cargofactssymposium.com.