SINGAPORE - The global air cargo market showed steady growth in demand at the start of 2017, according to data released by the International Air Transport Association (IATA) on Monday (March 6).
Demand, measured in freight tonne kilometers (FTKs), rose 6.9 per cent in January compared to the year-earlier period. While this was down from the 10 per cent annual growth recorded in December 2016, it still was well above the average annual growth rate of 3 per cent over the past five years, said IATA.
Growth in air freight capacity, measured in available freight tonne kilometers (AFTKs), slowed to 3.5 per cent in January.
The continued positive momentum in air cargo growth into 2017 coincides with a steady rise in new export orders, which reached their highest level in February, the latest data available, since March 2011, said IATA.
It noted that there has also been an increase in the shipment of silicon materials typically used in high-value consumer electronics shipped by air. The timing of the Lunar New Year in January this year also may have contributed to higher demand that month.
Said IATA's director general and CEO Alexandre de Juniac: "It's been a good start to the year for air cargo. Demand growth accelerated in January, bolstered by strengthening export orders. And that outpaced the capacity growth which should be positive for yields.
"And, longer-term, the entry into force of the Trade Facilitation Agreement (TFA) will cut red tape at the borders for faster, cheaper and easier trade. The onus is now on the industry to seize the opportunity to accelerate the modernization of processes to make air cargo an even more compelling option for shippers."
All regions, with the exception of Latin America, reported an increase in air freight demand in January, said IATA.
Asia-Pacific airlines saw demand in freight volumes rise 6 per cent year on year and capacity increase by 6.6 per cent. Seasonally-adjusted volumes were up considerably since early-2016 and are now back to the levels reached in 2010 during the post-global financial crisis bounce-back.
The increase in Asia-Pacific demand is captured in the positive outlook from business surveys in the region, said IATA. China's Purchasing Managers Index (PMI) for February has risen to a 21-month high, Japan's PMI to a 36-month high, while Taiwan, Korea, and Vietnam also reported increases in new export orders.
North American airlines' freight volumes expanded 6.1 per cent in January year on year, as capacity edged up 0.6 per cent. International freight volumes grew by 8.7 per cent - their fastest pace since the US seaports disruption boosted demand in February 2015. IATA said the strength of the US dollar continued to pump up the inbound market but kept the export market under pressure.
European airlines posted an 8.7 per cent increase in freight volumes while capacity rose 3.3 per cent. The strong European performance corresponds with an increase in reported new export orders, particularly in Germany over the last few months, said IATA.
Middle Eastern carriers' freight volumes rose 8.4 per cent year on year and capacity increased 3.3 per cent. Growth though has eased from the double-digit rates which were the norm over the past ten years. This corresponds with a slowdown in network expansion by the region's major carriers, said IATA.