Industry Pulse: Air cargo demand grows at twice the rate of capacity

Dive Brief:

Industry-wide freight ton kilometers (FTKs) grew by 8.8% in November 2017, nearly three percentage points higher than in October, the International Air Freight Association (IATA) reported.
Freight capacity grew at a rate of 4.0%, increasing over October's growth rate of 3.7%.
November 2017 was the 16th month in a row in which air freight demand grew at a faster rate than capacity.

Air cargo capacity grew in November 2017, but not enough to keep up with demand rates.

Supply Chain Dive

Dive Insight:

Air freight supply and demand haven't been in equilibrium since August of 2016.

Cargo capacity increased steadily throughout 2017. With the exception of February, air cargo supply increased, with May and June seeing growth rates of 5.2%. The rates, however, are not nearly enough to keep up with growing demand.

The year 2017 saw some of the highest demand growth rates since 2010 — 14.0% in March and 12.7% in May. This surge petered out in the second half of the year, with most demand growing less than 10% each month.

Looking ahead in the first six months of 2018, IATA has forecasted that FTK growth "is carrying momentum."

It's no longer a question of whether capacity can keep up, but rather, how narrow a gap can be maintained between air freight supply and demand.