Accelerated growth in air cargo for the month of July was especially pronounced in European and Middle Eastern markets, however the International Air Freight Association’s (IATA) in-house economist David Oxley warned that “there remain some reasons to be cautious, not least because annual growth in July was flattered somewhat by the favorable annual comparison.”
IATA’s air freight market analysis showed that, while global freight tonne kilometers (FTKs) accelerated to 5.0 percent, year-on-year, in July 2016, up from 4.5 percent, y-o-y, in June, FTKs have only increased at an annual rate of around 1.2 percent since the start of 2016.
The aggregated numbers suggest that air cargo is facing the same pressures that are weighing down profits across the global transportation sector. “The ongoing sluggishness of global trade growth continues to present clear headwinds for the air freight market too. Despite recovering slightly in month on-month terms in June, data compiled by the Netherlands CPB show that world trade volumes barely grew at all,” the report stated.
IATA’s latest analysis also raised concerns about sluggish global trade, which has, “lagged behind that seen in industrial production so far this year.” And while the organization stressed that there was no “mechanistic” link between airfreight and global trade, trends such as miniaturization and the changing relationship between global trade and output are a cause for concern.
In line with recent trends, Europe and the Middle East led the pack in terms of FTK growth, with 7.2 percent and 6.7 percent, respectively, for the month of July. And while the Middle East again led in numerical terms, the strong upward trend in the region’s seasonally-adjusted traffic has eased over the last six months. Between 2012 and 2015, the rate of growth increased by almost 14 percent each year, on average.
Africa and Latin America remained underperformers, both in terms of volume and growth in July. The two regions only account for 5 percent of total international traffic. Africa saw the biggest decline in seven years, down 6.8 percent. Latin America was down, as well, by 4.1 percent.
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