Airfreight casualty of widespread economic instability
In October, worldwide cargo volumes fell 4.7 percent, year-over-year, International Air Transport Association data revealed. IATA officials believe this figure reflects shippers’ increasing dependence on seafreight as a means to cut costs and freighter fleet-reduction measures among airlines.
“Cargo is the story of the month,” IATA Director General Tony Tyler said in a statement. “Since mid-year, the market has shrunk by almost 5 percent, and this is far greater than the 1-percent fall in world trade. Airfreight is among the first sectors to suffer when businesses confidence declines.”
Unfortunately, confidence in the manufacturing sector is at its lowest level since 2009, according to an IATA press release. Such uncertainty has led logistics providers to abandon the speedier, albeit more expensive, method of airfreight in favor of sea transportation, it explained.
Freight load factor was also down considerably in October, highlighted by a 5-percent, year-over-year, decline. The proliferation of wide-bodied passenger aircraft, despite the reduction of freighters, is said to have led to this loss.
All losses weren’t equal, however. Asia-Pacific carriers, who encompass 40 percent of the international air cargo market, reported a freight load factor of 58.8 percent in October — 12.3 percent higher than the global average. “This is a result of strong outward flows of freight from Asia, which dominates the air cargo business,” according to IATA.
Still, officials from the Association of Asia Pacific Airlines have expressed their concern about cargo volumes throughout the region. Freight-tonne kilometer levels for Asian-Pacific carriers decreased 7.7 percent, year-over-year, last month, and freight capacity fell 2.4 percent from October 2010.
AAPA Director General Andrew Herdman said these numbers speak to the general economic gloom plaguing the Western world. “Asian exports have been negatively impacted by the pattern of slower economic growth seen in Europe and North America, particularly in the second half of the year,” Herdman stated.
Cathay Pacific’s October statistics give credence to his remarks. The flag carrier of Hong Kong, along with subsidiary Dragonair, reported a 17.5 percent, year-over-year, drop in freight volumes last month, transporting only 135,998 tonnes of freight and mail in October.