October data support great expectations for 2014

If the industry needed any more convincing that the peak season for 2014 will be robust, the latest figures for October, released by WorldACD Market Data, the Drewry Sea & Air Shipper Insight and the Association of Asia Pacific Airlines (AAPA), might make a good closing argument. However, a continuing decline in yields over the last three years has put a damper on the celebration. 

WorldACD, which measures tonnage data reported on air waybills of more than 50 carriers, reported an air cargo volume increase of 5.5 percent, compared to October 2013 figures. Looking at data from January through October, the research firm predicted that that 2014 will end up as the second-strongest year since 2008, in terms of revenues, considering the current seafreight delays at North American ports that have driven up demand for air cargo services.

Overall yields (in US$) also increased by 2 percent over September 2014, but fell 2.3 percent, year-over-year. Since 2011, the best year since the global financial crisis, the industry has seen a 10.4 percent decline in yields.

Breaking down those figures, WorldACD reported that China and Northeast Asia showed year-over-year revenue growth surpassing 14 percent for their business to the United States. For yield improvement, the two leaders were South Asia to Southeast Asia and the U.S. to Southern Africa, each of which increased by 12 percent in October. Outgoing traffic from Southeast Asia and incoming traffic to the U.S. both had revenue increases of 12 percent, year-over-year. Global revenue from the transport of pharmaceuticals also rose by 9.7 percent.

WorldACD also analyzed the last three years of air cargo business between Asia Pacific and the Americas, finding that increases in trans-Pacific traffic volumes outperformed the global average, 12.8 percent to 7.3 percent, year-over-year. The eastward flow of traffic was 1.6 times the size of the westward flow. 

Drewry’s East-West Air Freight Price Index reached a 2014 high of 115.6 points, rising a dramatic 11.9 percentage points in October, thanks to strong peak-season demand and tight capacity. The modal shift from sea- to airfreight that has occurred since the port crisis began this summer on the U.S. West Coast has had a significant impact on eastbound trans-Pacific rates.

“We expect air rates to have remained high through November and into December, but to fall in January with the end of the peak season,” Drewry said.

AAPA’s data showed freight demand, measured in freight-tonne kilometers, rose 6.4 percent in October, buoyed by shipments of electronic goods from North Asia. Freight capacity for the month grew 3.8 percent, year-over-year, while the average international freight-load factor climbed 1.5 percentage points to 66.4 percent.

During the first 10 months of 2014, airfreight markets have grown by 5.1 percent, said Andrew Herdman, AAPA’s director general. “Generally positive regional economic conditions and trade gains provided support for continued growth in both passenger and cargo market segments,” he said.