Cargo demand jumped 4.2 percent for the month compared with the same 2017 period, down slightly from the revised 5.2 percent year-over-year growth rate seen in April but still up considerably from 1.7 percent in March, according to the latest data from the International Air Transport Association. The March increase was also the slowest pace in 22 months.
Growth in available air freight capacity also accelerated, from 5.1 percent in April to 6.2 percent in May, outpacing volume growth for the fourth consecutive month.
Through the first five months of 2018, air freight volumes are up 5.1 percent compared with the same 2017 period despite a “weak start” to the year, but the pace at which demand is growing remains “significantly slower” than in 2017, according to IATA.
The association in its midyear air cargo industry outlook forecast volumes to rise 4 percent for the full 2018 year, down from a previous projection of 4.5 percent growth.
IATA attributed the downward revision — and slowing growth rate — primarily to he end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand, as well as a 21-month low in new export orders and a softening of global trade caused by increasing “trade tensions.”
“We expect air cargo demand to grow by a modest 4.0 percent in 2018. That’s an uptick from a very weak start to the year,” said Alexandre de Juniac, IATA’s director general and CEO. “But headwinds are strengthening with growing friction among governments on trade.
“We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers.”
Broken down by geographical region, five of the six areas tracked by IATA recorded increases in demand in May, and three saw an acceleration in year-over-year growth rates.
Air freight volumes carried by Asia Pacific airlines climbed 4.9 percent for the month after growing 3.9 percent in April, while capacity grew 7.4 percent. IATA warned, however, that because Asia accounts for roughly 37 percent of all global air cargo shipments, “the risks from protectionist measures impacting the region are disproportionately high.”
European airlines saw freight volumes rise 2.3 percent in May, slowing from the 3.5 percent gain the previous month, as capacity increased 6 percent year-over-year.
“Seasonally adjusted volumes rose slightly over the past two months; however, the annualized rate of growth over the past six months remains low at only 1.5 percent,” IATA said.
Carriers in North America saw shipments jump 5.9 percent year-over-year in April, accelerating slightly from April’s 4.6 percent year-over-year growth rate. North America was one of only two regions in which capacity grew at a slower rate than demand, rising 5.4 percent for the month.
“The recent momentum of the U.S. economy and the U.S. dollar has helped strengthen demand for air imports,” the association explained. “Data from the U.S. Census Bureau shows a 12 percent year-on-year increase in imports by air in April, compared to 2.4 percent growth in March.”
Cargo volumes carried by Middle Eastern airlines ticked up 2.4 percent for the month, a “significant deceleration in demand” compared with the 6.9 percent growth seen in April, while capacity increased 3.3 percent.
Latin American airfreight carriers, meanwhile, saw an 11.4 percent boost in monthly volumes, up from 10.6 percent year-over-year growth the previous month and well ahead of the 1.5 percent increase in capacity in the region.
African airlines, on the other hand, saw shipments slip 2 percent from the same month a year ago after rising 5.6 percent in April, while capacity surged 20.4 percent.
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