IATA's September 2017 data for global air
freight markets shows that demand (measured in freight tonne
kilometers or FTKs), rose 9.2% compared to the same month in 2016.
That's the slowest pace of growth seen in five months, though
still significantly higher than the five-year average growth rate
Freight capacity (measured in available freight
tonne kilometers or AFTKs), rose by 3.9% compared to September of
last year, less than half the pace of demand growth.
It appears that the industry has passed a
cyclical growth peak. The upward trend in seasonally-adjusted
freight volumes in Q3 has eased and the inventory-to-sales ratio
in the US is now trending sideways. This indicates that the period
when companies look to restock inventories quickly - which often
gives air cargo a boost - has ended.
"Demand for air cargo grew by 9.2% in September.
While that’s slower than in previous months, it remains stronger
than anything we have seen in recent memory. But there are signs
that this demand spurt may have peaked. So it becomes even more
important to reinforce the industry’s competitiveness by
accelerating the modernization of its many antiquated processes,"
said Alexandre de Juniac, IATA’s Director General and CEO.
With year-to-date demand growth of 10.1%, the
IATA forecast of 7.5% growth in air freight demand for 2017
appears to have significant upside potential even if the peak of
the economic cycle has passed.
Airlines in all regions reported an increase in
year-on-year demand in September.
Asia Pacific airlines saw freight volumes
increase by 9.3% in September 2017, compared to the same period
last year. Capacity in the region expanded 5.3%. Demand growth was
strong on all the major routes to, from and within Asia-Pacific,
consistent with strong export order books for the region’s
manufacturers. Exporters in Chinese Taipei, China and Japan all
reported growing order books.
North American carriers posted an increase in
freight volumes of 7.4% for the month; the region also posted the
second fastest international growth rate among regions (11.0%).
Capacity increased 1.4%. The strength of the US dollar boosted the
inbound freight market in recent years. Data from the US Census
Bureau shows a 12.0% increase in air imports to the US in the
first seven months of 2017, compared to a slower rise in export
orders of 6.6%. However, there are signs that the decline in the
US dollar since the start of the year is beginning to rebalance
trade flows. In August 2017, the most recent month for which data
are available, exports from the US by air grew 12.7% while imports
by air grew more slowly at 7.4%.
European airlines posted a 10.3% increase
in freight demand in September 2017, and a capacity increase of
5.6%. Concerns that the recent strengthening of the euro might
have affected the region’s exporters have not materialized. In
fact, German manufacturers’ export orders are growing at their
fastest pace in more than seven years. Freight demand is strongest
on the routes to and from Asia - which have received a boost in
trade from the economic stimulus measures put in place by China -
and across the Atlantic.
Middle Eastern carriers’ year-on-year
freight volumes increased 8.9% in September 2017 and capacity
increased 2.6%. This was a slowdown in demand from the previous
month. A short-lived weak patch in demand in Q3 2016 has meant
that recent months have produced volatility in the year-on-year
growth rate. Seasonally-adjusted international freight volumes,
however, have continued to trend upwards at a rate of 8% over the
past six months. Still, strong competition, particularly on the
Asia-Europe route, means that Middle East carriers are not seeing
as healthy a pickup in the seasonally-adjusted traffic trend as
carriers in other regions.
Latin American airlines experienced a
growth in demand of 7.6% in September 2017 and capacity increased
by 5.9% compared to the same period in 2016. International freight
volumes rose by 8.6% over the same period. This is well above the
five-year average rate of 0.1%. The pick-up in demand reflects
signs of economic recovery in the region’s largest economy,
Brazil. Seasonally-adjusted international freight volumes are now
back to the levels seen at the end of 2014.
African carriers posted the largest
year-on-year increase in demand of all regions in September 2017,
with freight volumes rising 17.7%. This is a slowdown from August
but still more than twice the five-year average growth pace of
8.9%. Capacity increased by 2.6% over the same time period. Demand
has been boosted by very strong growth on the trade lane to and
from Asia which increased by more than 67% in the first eight
months of the year. However the upward trend in
seasonally-adjusted volumes has flattened in recent months.
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