Yes, but what does it mean?

According to WorldACD, worldwide air cargo volume was up 1.9% y-o-y in September, while yield (in US$) was down 17.5%.

Looking at the results from some of the world’s major carriers, airports, and handlers earlier this month, we predicted that once full September data were available, WorldACD and IATA would likely report flat, or even slightly negative y-o-y growth for the month. So WorldACD’s report of a 1.9% y-o-y increase in volume, while hardly an indicator of healthy demand growth, was a little better than we expected.

On the other side of the equation, a 17.5% decline in yield makes September sound like a month in which the air freight industry lost vast sums. But before going further, we repeat something that WorldACD said at the end of its report:

“The full dynamics of the worldwide air cargo business make it quite difficult to establish the market impact of individual trends, be they varying exchange rates, capacity changes, lower fuel prices, shifts to all-in pricing, matching and hedging, modal shifts, changes in demand or cost reductions. Much more research will have to be done to create a model describing how (the interplay of) these different trends may affect the various markets in which companies are active.”

To which we would add that it is all too easy to look at monthly reports and read more into them that we should. Take yield, for example. That 17.5% drop sounds terrible, right? But is it? And is a 1.9% increase in volume something to be worried about? Or something to be pleased with? Consider the following:

• Yield is a top-line item, based on revenue. Given that fuel prices fell by half during that same year-over-year period, and that fuel surcharges are part of revenue, it would be remarkable if yield hadn’t fallen steeply.

• And then there is the impact of currency. As WorldACD points out, industry-wide revenue growth varies depending on what currency is used. September revenue measured in US dollars was down 12% y-o-y. In Chinese yuan it was down 10%. But both the dollar and the yuan rose sharply against most of the rest of the world’s currencies, and, measured in Japanese yen, worldwide air cargo revenue was up 4% y-o-y in September, and measured in euros, it was up 8%.

• Also important in these year-over-year analyses is what was happening two years ago, not just last year. September 2015 volume (measured in chargeable weight) was up 1.9% over September 2014. But how did 2014 compare to 2013? Was it a month of strong recovery? Or, for whatever reason, a terrible month compared to the year before. Think about your favorite sports team, and their most recent victory. Did that victory come against a really strong team? Or against the worst team in the league?

So, while the monthly reports from WorldACD and IATA are useful, be careful what you read into them.