Cargo load factor updates launched

Established systems of air cargo demand measured against capacity — specifically, cargo load factor by weight — are receiving an update to account for changing trends in types of cargo shipped. CLIVE Data Services, a startup data services company, is launching a new analysis dubbed “the dynamic load factor,” aimed at measuring cargo-load factors from a volumetric, rather than weight-based, approach.

Traditional load-factor measurement has focused on the amount of cargo transported in kilograms, divided by the total cargo capacity in kilograms. However, as e-commerce shipments have exponentially increased as a share of overall air cargo, conventional means of capacity utilization may not account for the real utilization occurring, according to CLIVE.

“The fact that flights nearly always ‘cube out’ before they ‘weigh out’ is a result of the aircraft’s higher capacity density (available kgs per cubic meter) than the average density of the goods moved by air,” said Niall van de Wouw, CLIVE’s managing director, in a statement. “On the capacity side, we have new planes entering the market which can lift more kgs of cargo per cubic meter than ever before. And, on the cargo side, the surge in e-commerce traffic will further decrease the average density of the cargo flown.”

The approach to measuring load factor in cubic meters paints a much different picture of air cargo than typical reports on capacity utilization have recently. IATA reported consistent declines in cargo load factors throughout 2019, averaging less than 50%. On the other hand, the dynamic load factor accounting for volumetric, but lighter cargo, rates load factors for 2019 consistently between 61% and 67% throughout the year.

Whether this new approach to air cargo load assessments will come into wider use remains to be seen. However, carriers particularly involved in the transportation of e-commerce cargo could benefit from a more complete assessment of their cargo demand, as could the larger industry.