The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 4.1% in April 2018, compared to the same period the year before. This was up from the 1.8% growth in annual demand recorded in March 2018.
Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 5.1% year-on-year in April 2018. This was the second time in 21 months that capacity growth outstripped demand growth. After a sharp fall in March 2018, to a 23-month low, global air freight volumes recovered slightly in April 2018. The pace at which demand is growing, however, remains significantly slower than in much of 2017.
The weaker growth in air cargo is primarily due to the end of the restocking cycle, during which businesses rapidly increase their inventory to meet unexpectedly high demand. This is consistent with demand drivers moving away from the highly supportive levels seen last year. The Purchasing Managers’ Index (PMI) for manufacturing and export orders fell in April 2018 to its lowest level since 2016. A softening of global trade is also evident with containerized freight demand slowing in tandem with air freight demand. Seasonally-adjusted freight volumes continue to track sideways.
“April saw a strengthening from the abrupt slowdown in growth experienced in March. This is good news. We remain cautiously optimistic that demand will grow in the region of 4% this year. But the forecast appears to have increasing downside potential. Oil prices continue to rise as does protectionist rhetoric. Borders open to people and to trade drive economic growth and social prosperity. We are all disadvantaged when they are closed,” says Alexandre de Juniac, IATA’s Director General and CEO.
According to the statistics, all regions reported growth on 2017 levels, albeit at different levels of expansion. African carriers saw freight demand grow 5.6% in April 2018 compared to the same month last year, after a decline of 3.4% in March. Capacity increased by 23%. After a surge in international FTK volumes last year, seasonally-adjusted international freight volumes have trended downwards from a peak in late-2017 and are now at levels seen mid-2017.