Last week saw the release of the International Air Transport Association’s analysis of worldwide air cargo traffic in April, showing a decline in the year-over-year growth rate from 6.7% the previous month to 3.2% in April. But now, data from WorldACD contradict IATA’s conclusions and show growth in air freight demand continuing at well over 6% in April. Who do you believe?
Before going further, it is important to point out that WorldACD is measuring cargo volume (in tonnes carried), while IATA measure cargo traffic (in revenue tonne kilometers flown). However, unless there is dramatic surge or decline in short-haul relative to long-haul business, the relationship between volume and traffic is relatively stable.
With that caveat out of the way, we turn to IATA’s recent reports, which show cargo traffic worldwide up 6.7% y-o-y in March, and up 4.4% for the first quarter. But then, According to IATA, growth slowed to 3.2% in April. And not only did IATA say the growth rate was down in April, but that it would likely stay down for the rest of the year, as an economic slowdown in China and a general weakening of the world’s business activity weighed on the expansion of world trade. For full year 2014, IATA predicts total cargo traffic will be up 3.1% over 2013.
Contrast this with WorldACD’s data, which show cargo volume up 6.8% y-o-y for the first quarter of 2014, with growth continuing at almost the same rate in April – 6.3%. And where IATA cautions that slow growth – in the range of 3% – is to be expected until late in 2014, WorldACD says “expectations for the full year [are] upbeat.”
So who is right? We’ll have to wait until the end of the year to find out, but the May reports from IATA and WorldACD should provide some clues.
However, there is one point on which IATA and WorldACD (and every other source we have seen) agree: at whatever rate air freight demand is growing, yields are not keeping pace. The chart below, from WorldACD, shows rolling twelve-month average weight, revenue, and yield compared to full-year 2008. It is based on data on from “all Air Way Bills issued worldwide by, or on behalf of, fifty-one airlines , predominantly from the world’s top 50.”
