IATA: Favorable supply chain conditions suggest further cargo growth

June global air cargo traffic increased 9.9% compared to pre-pandemic levels in June 2019, according to today’s June analysis from the International Air Transport Association (IATA). Considering the record-low U.S. inventory-to-sales ratio, resilient demand for goods and affordable air cargo, further growth is expected in the months to come. North American airlines continued to exhibit the strongest performance with a contribution of 5.9 percentage points to the 9.9% total growth rate, according to IATA’s statistics. Year to date, global cargo traffic is up by 8% compared to the same six-month period in 2019, representing the strongest first half of a year since 2017. Meanwhile, seasonally adjusted month-over-month traffic remained stable over the past two months, implying that the strong rate of growth compared to pre-pandemic times is due to gains that occurred during the second half of 2020 and early 2021, according to the report. Maritime container shipping remains severely congested, resulting in significantly increased rates. However, air cargo rates — up by more than 90% in May 2021 compared to the same month in 2019 — have fallen in June, according to IATA. Considering the slow return of passenger belly space, it is likely that the positive trend in cargo capacity will pressure rates to continue to decline. While June 2021 global capacity, measured in available cargo tonne kilometers (ACTKs), was down 10.8% compared to the same month in 2019, seasonally adjusted volumes have flattened, according to IATA. Although belly capacity remained 38.9% below the same month in 2019, dedicated freighter capacity increased to 29.7% compared to June 2019. As a result, industry-wide cargo load factors remained high in June compared to pre-pandemic levels, and reached 56.5%, up 25.3 percentage points compared to the same month in 2019. Meanwhile, the international load factor was at 64.2% in June 2021. North America Looking at market performance regionally, North American airlines continued to be the main contributor for June’s volume growth and posted a 23.4% rise in CTKs for June 2021. The growth is attributed to the high manufacturing Purchasing Managers Indices (PMIs) and exceptionally low good inventories, according to the analysis. Africa, Middle East, Europe Airlines based in Africa reported a 33.5% growth in international CTKs, which is slightly more than May 2021 which reported a 24.5% growth in international CTKs, according to IATA. Carriers based in the Middle East reported a 17.1% increase in international CTKS in June 2021, compared to the same month in 2019. This is attributed to the strong performance of the Middle East-Asia and Middle East-North America trade lanes. Meanwhile, European airlines posted a 6.6% improvement in June 2021 compared to the same month in 2019 due to the region’s strong manufacturing PMIs. Asia Air cargo growth within Asia reported a 3.8% increase in international CTKs in June, compared to June 2019. Although demand is high, the region is still experiencing a lack of international capacity and lower manufacturing PMIs compared to Europe and the U.S., according to the report. Latin America Although carriers based in Latin America saw an improvement in cargo traffic in May , the rebound did not continue in June. International CTKs were down 22.9% in June compared to the same month in 2019 and is attributed to market shares lost to carriers in other regions, according to the report.

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