Surge Measured in Air Cargo Supply Chains

Global air freight markets showed a strong increase in air cargo in July, with the Asia Pacific continuing to lead the way.

According to the The International Air Transport Association (IATA) Asia-Pacific airlines showed their strongest rise in air cargo volumes since the start of 2013, increasing 7.1% compared to a year ago. The fortunes of the region’s carriers are tied to the strength of major economies such as China, Japan and South Korea, which are expanding again after a slowdown at the start of the year. Capacity grew 4.0%.

“Overall, July saw growth accelerate. That’s good news and it reflects the continued strengthening of business confidence at a global level,” said Tony Tyler, IATA’s Director General and CEO. “But the air cargo industry is moving at two speeds with a sharp divide in regional performance.”

Tyler noted that European carriers reported anemic growth of just 1.8% while all other regions reported solid gains of 5% or more on the previous year.

“In particular, the 7.1% growth reported by airlines in Asia-Pacific is encouraging as it demonstrates a recovery in trade and a positive response to China’s economic stimulus measures,” Tyler added.
Earlier this year, analysts speculated that more shippers of high-end perishables would opt for air rather than ocean carrier if West Coast waterfront labor conditions remained uncertain.

Brandon Fried, executive director of the Airforwarders Association (AfA), observed that this was especially true for consignments with time constraints, higher value and a need for tight inventory or temperature control.
“Airfreight brings more value,” he said.

Global air cargo volumes have now surpassed their previous July peak, in 2010, and look set to continue to increase. European air freight, however, grew just 1.8%. This reflects the effects of the Russia-Ukraine crisis (including the impact of mounting economic sanctions), which is adding to economic weakness in the Eurozone.

Meanwhile, North American airlines grew their freight volumes by 5.2%. After weakness in the first quarter, trade volumes have rebounded and business growth trends look positive for the months ahead. Capacity fell 1.3%.

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