Continuing a trend that first became noticeable in September, demand for global airfreight grew in October at the fastest rate the industry has seen in the last year and a half, according to the latest figures from the International Air Transport Association (IATA). Measured in freight tonne kilometers (FTKs), the growth rate for the month reached 8.2 percent, year-over-year, more than doubling the 3.6 percent rate of freight capacity growth in available freight tonne kilometers (AFTKs) over the same period.
While the airfreight market is now expected “to end 2016 on a high note,” Alexandre de Juniac, IATA’s director general and CEO warned that the industry still faces “headwinds from weak global trade,” and that the growth may not last much longer than the current peak season. Still, he added, “The peak has been stronger than expected, and purchasing managers are reporting a pick-up in new export orders. So we will enter 2017 propelled by some much-needed positive momentum.”
Every world region showed significant growth in air cargo demand for October, with the exception of Latin America, which was essentially flat, reporting a slight 0.1 percent dip in demand, year-over-year. Europe led the world in growth, with a robust 13.4 percent increase, y-o-y, followed by the Middle East, at 9.2 percent growth, and Asia-Pacific, at 7.8 percent, y-o-y.
IATA also noted that there were a number of “one-off” factors that may have contributed to the spike in demand, such as some minor modal shifting from ocean to air cargo that may have occurred in October following the August bankruptcy and collapse of the Hanjin Shipping Co., although most forwarders and carriers have said the bankruptcy had little effect on their operations. Also, there could have been an increase in last-minute orders for air shipment as companies exercised caution in ordering for the peak season following weak market conditions earlier in the year.
Then there is the growth of both cross-border e-commerce and pharmaceutical demand to consider, IATA said. Preparation for the increasing popularity of sales events such as Black Friday and Cyber Monday in the United States, and Singles Day in China, may also have contributed to the increased demand peak, IATA said.
“The drivers of stronger growth are sending a major signal for change to the air cargo industry,” de Juniac added. “Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to e-freight is more critical than ever.”