IATA reports historic air cargo peak ahead of tariffs

March marked a historic peak in air cargo traffic for that month, according to data released this week by IATA. March’s air cargo traffic , measured in cargo tonne kilometers (CTK), rose 4.4% year over year, reversing course from February’s YoY contraction of 0.1%, the first YoY decline since July 2023. The 4.4% hike was the most on record for March. Traffic on international lanes rose 5.5% YoY. Capacity, measured in available CTKs, rose 4.3% YoY overall and was up 6.1% YoY for international operations. “It is possible that this is partly a front-loading of demand as some businesses tried to beat the well-telegraphed April 2 tariff announcement by the Trump administration,” IATA Director General Willie Walsh said in the release. The U.S. imposed a flat 10% tariff against all countries, effective April 5, and has delayed the implementation of reciprocal tariffs pending negotiations with affected countries. The only country excluded from the reciprocal tariff reprieve is China. The U.S.’s tariff against China is now 145% and China’s against the U.S. is 125%. Also, U.S. de minimis exceptions for goods from China and Hong Kong is scheduled to end May 2. Additionally, March volumes typically rise after a lull in February, and this single-digit increase is in line with pre-pandemic growth trends, IATA said. External factors IATA highlighted these operating environment factors: Jet fuel prices dropped 17.3% YoY, marking nine straight months of YoY declines, IATA said. The monthly average spot price for U.S. Gulf Coast jet fuel in March was $2.07 per gallon , a 20.2% YoY decrease, according to the Energy Information Administration. March’s monthly average was 19 cents lower than February’s monthly average of $2.26 per gallon. The sharp rise in U.S. tariffs and new trade rules, especially the May 2 ban on duty-free imports from China and Hong Kong, led to advance purchasing to avoid later import fees. World industrial output grew 3.2% YoY and trade volumes expanded 2.9% YoY. Many key consumer price inflation (CPI) indices fell. U.S. inflation was 2.4%, down 0.4 points from February; EU CPI was 2.5%, up 0.2 percentage points; and Japan’s rate fell 0.1 percentage points from February to 3.6%. China was still experiencing deflation, but this eased to a contraction of 0.1% from February. “The uncertainty over how much of the April 2 proposals will be implemented may eventually weigh on trade,” Walsh said. “In the meantime, the lower fuel costs — which are also a result of the same uncertainty — are a short-term positive factor for air cargo. “And, within the temporary pause on implementation [of retaliatory tariffs], we hope that political leaders will be able to shift trade tensions to reliable agreements that can restore confidence in global supply chains,” he said. [caption id="attachment_57287656" align="aligncenter" width="1327"] (Courtesy/IATA)[/caption] Regional performance Asia-Pacific carriers saw the most YoY traffic growth of all regions, while Africa saw the largest YoY fall in traffic. Though not the largest contraction, the Middle East did see air cargo traffic fall YoY in March. IATA attributes this, at least partially, to the region’s strong growth of 19.9% YoY in March 2024, resulting from disruption to sea freight in the Red Sea . By region YoY: Asia-Pacific carrier traffic grew 9.6% and capacity grew 11.3%; North American carrier traffic grew 9.5% and capacity grew 6.1%; Latin American carrier traffic grew 5.8% and capacity grew 4.7%; European carrier traffic grew 4.5% and capacity grew 2%; Middle Eastern carrier traffic fell 3.2% and capacity grew 0.8%; and African carrier traffic fell 13.4% and capacity grew 10.5%. The Europe-North America route was the busiest trade lane in March. The largest trade lane by market share at 24.5%, Asia-North America also grew strongly, possibly encouraged by front-loading shipments ahead of potential tariffs. By trade lane: North America-Europe grew 8.5% YoY, the 14th consecutive month of growth; Europe-Asia grew 8.3% YoY, the 25th consecutive month of growth; Asia-North America grew 7.3% YoY, resuming growth after a revised fall of 0.5% in February; Intra-Asia grew 5.5% YoY, the 17th consecutive month of growth; Middle East-Asia grew 2.9% YoY, the first growth after two months of contraction; Middle East-Europe fell 7.5% YoY, the third consecutive month of contraction; Intra-Europe fell 5.2% YoY; IATA has not previously provided data on this trade lane; and Africa-Asia fell 40.2% YoY, the fourth consecutive month of contraction. Register now for Cargo Facts EMEA, an essential regional event for industry stakeholders, on May 6-8 at the Shangri-La Bosphorus in Turkey.

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