Dive Brief:
- Industry-wide freight ton kilometers (FTKs) were off to a strong start in 2018, with volumes growing 8.0% in January, an increase over December 2017's growth of 5.7%, the International Air Transport Association (IATA) reported.
- Available freight ton kilometers (AFTKs) grew 4.2% — about half the growth rate of demand, but still at a faster pace than in December.
- Air freight supply reached its fastest rate of growth since September 2017.
Dive Insight:
IATA attributes the "robust start" for the air cargo industry to unusually high demand due to the Chinese New Year. Effects of the holiday certainly were not unique to air freight. Ocean shipping rates soared on China to U.S. coast routes.
The Chinese New Year could be distorting air's January growth rate and artificially inflating air freight volumes. "We will have to wait until we have February data to get a more complete picture of the strength of freight demand during the opening months of 2018," IATA wrote in its analysis.
For 2018, IATA expects FTKs to grow about 4.5%. The outcome of numerous market factors, however, could sway that projection either way.
With tariffs being implemented and threats of a trade war looming, cross-border transport could become more challenging. "The recent imposition of tariffs on steel and aluminum products by the US poses obvious downside risks to broader global trade," IATA said.
In addition, ONE, a merger of Japan's top three container carriers in 2016, sets sail this week, which could have shippers favoring ocean transport over air. But if the new carrier runs into hiccups as it rolls out operations, cargo owners will likely be flocking back to air freight.
