Already well into the second quarter of 2016, uncertainties remain for how airfreight demand will develop in 2016. Figures from April are perhaps the most anticipated this year for two reasons. First, the data is well-distanced from the January-February annual disruptions caused by the Lunar New Year celebration which often softens demand during one of the two months, while buoying the other, as shippers send-out goods ahead of factory idling. Though, usually by March, this impact subsides. This year is unique in that we have a second major irregularity factoring into our annual comparison. The west coast port disruptions of 2015 forced shippers to send goods by air that were normally sent by sea, as manufacturers and retailers in the United States scrambled to maintain production, and keep products on the shelf. On 12 March 2015, port workers began to return to the job, and by April, the strike factor should finally begin to disappear from annual comparisons. But will April provide us with hoped for growth?
Last week IATA released its figures for the first quarter of 2016, which showed a 2.1% drop, year-over-year, in overall cargo traffic, and most recently, a 2.0% drop in FTKs for March.
Admittedly it will be another two weeks before we have a complete picture of what happened in April, but traffic reported by Pudong International Airport Cargo Terminal Co. Ltd (Pactl), the biggest cargo handler at PVG provide a good first look at the month’s performance. If Pactl’s April figures are any indicator, growth appears to be modest.
Pactl reported its April handle up 3.3% y-o-y to 139,000 tonnes. International volume was up 4.3%, to 130,000 tonnes, while the much smaller domestic volume dropped 9.6% to 8,700 tonnes. For the first four months of 2016, Pactl’s handle was up 2.0% to 507,000 tonnes.
This year, even growth around 3% for the month of April would be well-received, but cargo volume growth at Pactl has been outperforming the industry for most of the year—1.5% growth in 1Q 2016, compared to the world average of a 2.1% contraction. A realistic expectation then, is nil to modest growth of somewhere between 0% and 2% in world traffic for April. Still, the report of growth from one of the world’s biggest handlers is good news nonetheless.Like This Post