In its end-of-the-year analysis of the international air cargo market, WorldACD called the month of December – prepare to wince – a “double whammy.” According to the report, air cargo volume growth and yield growth were both negative, year-over-year, during the month.
WorldACD said that the last week of 2018 was “particularly worrisome,” noting that the numbers were “a serious 10 percent below” where they were for the same week in 2017. Curiously, volumes from prominent cargo regions – Asia-Pacific, Europe and North America – dropped “by larger percentages than those from the smaller areas.”
Each month during the 8-month period between January and August showed year-over-year volume growth, WorldACD said – although, growth margins progressively shrank toward August. Then, in September, the trend of withering y-o-y volumes began; three out of the four final months of the year recorded y-o-y volume decreases. Still, zooming out to the whole year, volume was 2.2 percent higher than 2017’s total.
The effects of the United States-China trade war could also be seen int the trans-Pacific traffic results, WorldACD said. Volumes ex-China and Hong Kong (HKG) to the U.S. were down 3.6 percent, y-o-y, while volumes ex-U.S. to China/HKG were even more dismal – down by 8 percent, y-o-y.
So, eastbound trans-Pacific traffic was more dramatically impacted than westbound traffic.
But comparing both regions’ export volumes to other international destinations, for reference, the picture still doesn’t look sunny. Average traffic volumes to the rest of the world ex-China/HKG and ex-U.S. were down by 4.8 percent and 3.4 percent, respectively.
There were some positive trends over the year if, one breaks the international picture down into regions. Central and South America bucked the negative trend, increasing outgoing volumes by 8.4 percent, y-o-y. And Chile, Costa Rica, Cambodia, Uganda and Mozambique all sustained growth every month of the year.
Pharma volumes moved by air worldwide increased a whopping 14.8 percent, followed by dangerous goods and “vulnerables,” or high-tech equipment, which each increased 7.7 percent, y-o-y. Fruits and vegetables were the only category with negative growth -0.2 percent.
WorldACD speculated that the international dip in air cargo markets could be, in part, a result of what the Economist calls “slowbalisation,” which is the concept that “deeper links within regional blocks with supply chains sourcing closer to home in North America, Europe and Asia.”
Both a potential international slowbalisation trend and 2018’s dawn of protectionist policies serve to disincentivize international trade, which could lead to the apparent softening of demand for airfreight evident in WorldACD’s results.