Air freight loses momentum amid weak world trade

Dive Brief:

Air freight ton kilometers (FTK) grew at a rate of 4.2% in May, a marginal increase from April 2018's growth rate of 4.1%, according to data from the International Air Transport Association (IATA). The association expects FTKs to grow 4% overall this year.
Supply of air freight transport, measured as available freight ton kilometers (AFTK), grew at its fastest rate in more than two years, posting a growth rate of 6.2% in May.
"The best of the upturn in air freight demand is well behind us, and the underlying world trade backdrop looks to be weakening," IATA said in its analysis.

Air freight IATA May 2018 — Air freight supply is growing at its fastest rate in two years, but demand is flat.

Shefali Kapadia / Supply Chain Dive, data from IATA

Dive Insight:

Air freight demand is seeing a "loss of momentum" driven by a combination of economic cycles and weakening world trade, according to IATA.

In May 2018, new export orders fell in most of the world's largest economies, including Germany, Japan and the U.S. Global container trade growth has fallen significantly this year, suggesting "world trade conditions may be weakening in the face of the recent pick-up in protectionist measures," IATA said.

While exports overall are falling, imports to the U.S. are seeing the opposite effect. Import volumes by air grew 12% in April, up from 2.4% in March, IATA said, citing data from the Census Bureau. And it's not just airports seeing volumes jump — the Port of Oakland reported its import cargo volume reached an all-time high in June.

The strong U.S. economy and dollar are factors, but many experts believe shippers are importing aggressively before additional tariffs go into effect between the U.S. and its largest trading partners.