WorldACD found that the impact of 2019’s challenging political economic conditions persisted through to the end of the year with the release of its December report this week, which indicated a 1.7% year-over-year decrease in cargo volumes worldwide for December. This YoY decrease in volumes was the smallest since January 2019, but they were not the positive figures the air cargo industry had hoped for during the holiday season.
Overall, WorldACD said the results for the full year 2019 “were not impressive.”
Worldwide revenue, measured in U.S. dollars, for the entire year fell by 11.7% YoY, and also did not grow compared with 2017. WorldACD attributed the decline to a YoY yield drop of 7.6%, as total weight fell by 4.4% YoY.
Only high tech and pharmaceuticals saw YoY growth of around 8.5% in volume for 2019, but their yield drops,though not as steep as in general cargo,were cause for concern for the airlines, WorldACD said.
Looking more closely at the performance of various regions over the course of 2019, Europe as an origin point was the “hardest hit” in 2019, and lost more than 16% of its revenues compared to the previous year, with Germany accounting for half of Europe’s decline. Consistent with reports during the course of 2019, Africa and Latin America fared better than the larger regions in the Northern Hemisphere. While revenue for Asia Pacific and Europe outbound was slightly better than inbound, the opposite was the case for North America. This may then suggest where the consequences of the U.S.-China trade war on air cargo were most felt, although they are not easy to pinpoint, according to WorldACD.
Exploring the claim, WorldACD shared the following data:
Total China inbound revenues dropped by 6%, but China outbound increased by 2.7% YoY in total, increased by 2.8% to Europe, and dropped by only 0.3% to the U.S. These figures certainly look better than the worldwide drop of 4.4% YoY. But this was not the entire story, as one of China’s gateways, Hong Kong, lagged behind considerably: overall export by air fell by 5.5%, but the decrease in business to Europe and the U.S. was felt much harder, falling by 10.8% and 14.4% respectively.
The U.S., on the other hand, saw total outbound decrease by 5.3% YoY, and lost less than that in its air cargo business to China, with a 4.9% YoY decline, but more to Europe, with a 5.7% YoY decline. Revenue for inbound U.S. traffic fell 4% YoY.
In 2020, stakeholders in air cargo maintain conservative optimism about industry prospects this year, but are still waiting to see how the various global political and economic developments, including Brexit, the U.S.-China trade deal, and volatility in the Middle East, will evolve in the coming months.