Dive Brief:
- For the first time in 20 months, air freight capacity grew at a faster rate than demand, according to data from the International Air Transport Association (IATA).
- Demand, measured in freight ton kilometers (FTKs), grew at a rate of 1.7% in March — a 22-month low. Meanwhile, available freight ton kilometers (AFTKs), or supply grew 4.4%.
- In its monthly analysis, IATA warned against "reading too much into the softening" and said it expects FTK growth to continue around 4-5% this year.
Dive Insight:
While air cargo saw significant growth in the beginning of the year, that figure took a nosedive in March 2018. The drop mirrors IATA's prediction from the previous month, that air freight's peak may be behind us.
IATA attributed the main reason to a change in economic cycles. "The boost from the inventory re-stocking cycle looks to have run its course," the organization said in its analysis.
The cycle provided a significant boost to air freight, helping volumes grow twice the rate of global goods trade last year.
But geopolitical factors such as trade uncertainty may exacerbate the shrinking growth rates. "Given the recent rise in protectionist rhetoric and measures, the risks to the outlook for air freight growth are tilted to the downside," IATA said.
Despite those factors, air cargo capacity is still on track to grow overall for the year, albeit likely at a slower rate than 2017.
