Dive Brief:
- Growth of air freight ton kilometers (FTKs) rebounded in April 2018 to a rate of 4.1%, up from a slump in March where growth was just 1.7%, according to data from the International Air Transport Association (IATA). The March growth rate was the lowest in nearly two years.
- Air freight supply picked up as well and grew at a faster rate than demand, with available freight ton kilometers (AFTK) growing 5.1% in April.
- IATA said it expects FTK growth around 4% for 2018, noting that air cargo volumes are now trending "sideways."
Dive Insight:
For the second consecutive month, growth of air cargo supply exceeded demand. Before March 2018, the last time supply outpaced demand was August 2016.
With this two-month trend, IATA said the industry is largely trending sideways in terms of growth. "The implication is that the annual FTK growth rate will slow once again towards mid-2018," IATA said in its analysis.
The association attributes much of the slowdown to natural ebbs and flows of the restocking cycle, suggesting air freight's peak is likely behind us.
Despite an apparent slowdown, the air industry isn't backing away from plans to expand air cargo capacity. Boeing is considering converting its 777 jets to cargo carriers to cope with demand, and a plan to expand London's Heathrow airport to handle large volumes of passengers and cargo was approved by the U.K. Parliament.
IATA still expects FTK growth around 4% for the year, but it also said global trade of containers has been slower, with export orders falling from major economies such as China, Germany and the U.S.
With both air cargo demand and trade volumes falling, "these factors suggest that wider momentum in world trade growth may be weakening alongside the recent pick-up in protectionist measures and rhetoric," IATA said. "It is prudent to be cautious about the wider outlook for world trade."
