Volume growth at Pactl raises expectations

Over the past decade, Shanghai Pudong International Airport (PVG) has grown in importance in the air freight universe to the point that it is now the second busiest airport in the world for international cargo, behind only Hong Kong (HKG), and the third busiest for total cargo, lagging only Hong Kong and Memphis (MEM).

Pactl, the biggest cargo handler at PVG, has become something of a bellwether for the state of the air freight industry, in the sense that growth or decline in cargo volume at PVG in general and Pactl in particular usually reflects what is happening to overall air freight demand, whereas HKG is subject to wider swings, and MEM handles almost no freight other the FedEx’s express volume.

For those looking for clues about patterns in demand for air freight, PVG also offers the advantage of being one of the first major air cargo players to report monthly results. So, given some of the negative analyses recently published about the lack of year-over-year growth in March being a harbinger of difficult times ahead, it was with more than a little interest that we looked to Pudong International at the end of last week for publication of its April cargo performance.

Of course, one month, for one handler, at one airport, even if that handler/airport combination is Pactl and Shanghai Pudong International, does not absolutely guarantee anything about worldwide cargo trends, but, for what it’s worth, Pactl had a very good month, reporting its April handle up 7.2 percent year-over-year to 163,000 tonnes. For the first four months of 2018, Pactl’s handle was up 6.3 percent to 600,000 tonnes. International volume was up 7.4 percent in April to 155,000 tonnes, and up 6.8 percent to 569,000 tonnes for the year through April. The much smaller domestic volume was up 3.8 percent in April to 8,000 tonnes. (Most of Shanghai’s domestic cargo moves through Hongqiao Airport (SHA)).

Given that Pactl’s reported growth is usually one or two percentage points ahead of worldwide growth, it seems reasonable to hope for year-over- year demand growth worldwide in April in the range of 5 percent to 6 percent. Not as spectacular as last year’s double-digit percentage growth, but a solid result that will leave air freight players more than happy.