For the global air cargo industry, 2017 has been a year of high demand and big numbers. There have been huge uptick in tonnages, significant rise in load factors and substantial improvement in yield. And it expects to continue the growth in 2018 too.
For the global air cargo industry, 2017 has been a year of high demand and big numbers. According to the latest available report from the International Air Transport Association (IATA), the world air-freight market is on track for its strongest year of growth since the global economic-crisis rebound of 2010.
Air freight demand, measured in freight tonne kilometers (FTKs), rose 5.9 percent in October 2017 compared to the year-earlier period. This was a slowdown from the 9.2 percent annual growth recorded in September 2017 but still exceeded the average annual growth rate of 3.2 percent over the past decade.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 3.7 percent year-on-year in October. This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance.
While cargo demand remains strong, several indicators show that the industry may have passed the growth peak. The inventory-to-sales ratio in the US is tracking sideways, indicating that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended. The new export orders component of the global Purchasing Managers' Index (PMI) is stable. And the upward trend in seasonally-adjusted freight volumes has moderated.
"Tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post global financial crisis rebound in 2010," said Alexandre de Juniac, IATA's director General and CEO.
This story is from the January 2018 edition of The STAT Trade Times.
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This story is from the January 2018 edition of The STAT Trade Times.
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