Through the past two weeks, as we analyzed the March results coming in from the world’s big cargo carriers and airports, we predicted that when IATA and WorldACD published their comprehensive data for the month, they would show a double-digit increase in demand for air freight. When we saw the last results to come in, we wondered if we should revise our prediction to read: “Well into double-digits.”
Today, WorldACD confirmed this, with data showing air cargo volume (measured in chargeable weight) up 14.9% y-o-y in March – the biggest year-over-year gain since the wild spike in demand following the crash of 2008. But whereas that spike came in comparison to a year in which a massive world-wide recession caused the bottom to fall out of air freight demand, the current growth comes in comparison to early 2016, when demand was down slightly from what it had been in 2015, but not truly bad. That is, while March 2016 offers a soft comparison, we believe the growth in March, and in the first quarter of, 2017 is real, not just a recovery.
Because neither cargo volume (in tonnes carried) nor cargo Traffic (in tonne-kilometers flown) paint a complete picture of air freight demand, WorldACD developed a new measure, Direct Tonne Kilometers (DTKs), which combines weight with the direct distance between origin and destination. This eliminates one of the big problems with the standard tonne-kilometer metric, and offers a more accurate measure of cargo Traffic. Using this standard, WorldACD said worldwide cargo Traffic in March, measured in DTKs, was up 16.4% over March 2016.
The most obvious thing that jumps out from chart above is the height of the red bar representing cargo volume in March. Less striking, but just as important, is that the blue bar representing yield is in positive territory for the first time in over a year, and up 5.1 percentage points over the previous month.
What can we expect for the rest of the year? Demand growth picked up beginning in April 2016, so comparisons will become tougher as this year progresses. But anecdotal reports from a variety of sources indicate that, in April at least, demand has not fallen off. So, while air freight demand probably will not continue to grow at the rate seen in March, it looks to remain strong.