Cargo growth trend pauses, says IATA
According to data released by The International Air Transport Association (IATA) air freight markets in March were up 5.9 percent compared to a year ago and capacity grew 3.4 percent. However, these figures demonstrate significant improvement in volumes compared to March 2013, much of the growth happened in the last quarter of 2013, a period normally records high volume growth because of the year-end activity. Since the beginning of the year, air cargo volumes have been basically flat. This plateau in volumes is consistent with the recent pause in improvements to business confidence and world trade.
“Cargo markets had a boost in the last quarter of 2013, but have now levelled off. It is a competitive industry with growing capacity chasing weak demand. The business cycle will eventually swing upwards. But the air cargo industry also needs to improve its value proposition if it is to attract growth when markets improve. Modernizing air cargo processes and infrastructure offers the potential to cut end-to-end shipping times by up to 48 hours. We cannot let market doldrums hold us back from this critical competitive gain,” said Tony Tyler, IATA’s Director General and CEO.
Asia-Pacific carriers grew 6.9 percent compared to a year ago. However, it is the performance of Middle Eastern carriers that get the highlight. They saw a 13.2 percent year-on-year rise in FTK volumes. This strong performance comes on the back of airlines taking advantage of growth in both developed and emerging markets. Carriers in the region are expanding their networks and services, broadening the range of goods they transport. Capacity grew just 4.7 percent, taking the load factor to nearly 50 percent. While European airlines expanded by 5.1 percent it was just 1.9 percent growth for North American carriers. Latin American air freight volumes were flat. African airlines expanded 5.9 percent compared to March 2013.
In the 40 years since the introduction of the 747 freighter, the end-to-end shipping time for goods by air has remained unchanged, at six to seven days. During this period, innovators have created a new value proposition for shippers and consumers based on an end-to-end model, speeding up deliveries through integrating the airline and ground components of freight, challenging the existing business model for many participants. At the World Cargo Symposium in March, IATA’s Global Head of Cargo Des Vertannes challenged the industry to cut the end-to-end air freight shipment time by 48 hours by the year 2020, to enhance the competitiveness and value of air cargo.