Dive Brief:
- Air freight demand grew at its fastest pace since May 2018, with freight ton kilometers (FTKs) rising 3.1% in October, according to data from the International Air Transport Association (IATA).
- Capacity also ticked up at its highest growth rate since May, at a rate of 5.4%, compared to September's 3.2% growth in available freight ton kilometers (AFTKs).
- "Freight capacity has now risen at an annualized rate of 6% over the past six months — around two percentage points faster than demand," IATA said in its analysis.
Dive Insight:
The fourth quarter of the year is traditionally a busy time for cargo operations, and IATA's October data shows 2018 is no different.
Growing e-commerce volumes continue to boost air freight demand, offsetting other factors affecting the industry, such as softening consumer confidence and contraction in exports.
"We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note," said Alexandre de Juniac, IATA's Director General and CEO, in a press release.
North American airlines grew at the fastest pace of any region in October 2018, with demand rising 6.6% YoY. IATA attributed the region's growth to a strong U.S. economy and consumer spending, despite consumer confidence waning since the beginning of the year.
Capacity in the North American market increased as well at a rate of 8.2%. All regions saw capacity grow at a faster rate than demand.
Despite the increase in supply, air freight rates reached their highest level of the year in October and are expected to continue climbing into peak season, according to Air Cargo News. Average rates on 57 major routes reached $3.02 per kilogram in October, compared to $2.81 the month before.
