World ACD: Global airfreight market shows ‘modest’ growth in July

Cargo shipments grew for the second straight month in July 2016, rising 1.8 percent compared with the same 2015 period after a 2.7 percent year-over-year increase in June, according to industry analyst World ACD.    Global airfreight volumes grew for the second straight month in July 2016, rising 1.8 percent from pared with the same 2015 period after a 2.7 percent year-over-year increase in June, according to the latest figures from industry analyst World ACD.
   The June increase, which the firm attributed primarily to strong volumes in the Asia Pacific region, followed several months of declines.
   Shipment levels in July reflected 3.7 percent growth in Asia Pacific and a 0.2 percent uptick in Europe, but were offset by declines of 1.2 percent and 1.8 percent, respectively, in Africa and Central and South America, said World ACD.
   The Asia Pacific region “looks to be on its way to reclaim the position of air cargo’s engine as Europe is losing a bit of its recent luster,” the firm said.
   Yields, measured in U.S. dollars, remained steady from June 2016 thanks to the “modest” growth in volumes and above-average yields. All origin areas showed a slight increase in yields with the exception of Europe and North America.
   Through the first six months of the year, yields fell most sharply in Asia Pacific (down 21 percent) and least in Central and South America (down 3 percent) and Africa (down 5 percent) compared with the same 2015 period.
   Given the disappointing results so far in 2016, airlines may seek to optimize distribution, while forwarders could look to expand their market share, said World ACD.
   The firm noted that Europe and North America sport the largest number of active airfreight forwarders at around 3,000 each, but volumes per forwarder differ greatly from one country to the next.
   Forwarders in Japan, for example, have the highest average volume, twice the average for Hong Kong, three times that of China, four times that of Germany, seven times that U.S. forwarders, and eight times the average volume of those in the United Kingdom.
   “More than half of all forwarders do 95% or more of their business in one country only,” said World ACD. “These ‘local players’ make up 64% of all forwarders in MESA and 40% in Europe. They capture 31% of all air cargo worldwide. The highest volume share for this group is found in Latin America (54%); their share in China is 45% and in the USA 24%.
   “Will these parties increasingly become takeover targets?”
   “Forwarders looking to expand, will want to take note, as airlines may be out to simplify their worldwide distribution arrangements,” the firm added.