Dive Brief:
- Global freight ton kilometers (FTK) rose by 5.9% in October YoY and available freight ton kilometers (AFTK) rose 3.7%, marking a hearty start to Q4 2017 even though FTK growth already peaked.
- According to IATA's monthly report, capacity is still struggling to keep up with demand, especially as all modes of freight continue to surge due to e-commerce and the holiday peak season.
- IATA noted that every Q4's first month is typically strong, so the air freight industry should expect a downturn after the holidays.
Dive Insight:
Air freight may have peaked, but IATA's data indicates that 2017 is still on track to be the strongest year in terms of volume since 2010. Cyclical peaks and valleys are normal for all modes of freight, which is why the industry shouldn't be too concerned that air freight has reached its cyclical peak.
One concern, however, is that capacity still hasn't caught up with demand. Air freight has grown explosively due to a post-recession rebound and e-commerce, and is expected to continue strong growth in 2018, so it's no surprise capacity growth lags.
But industry tension could be keeping capacity from catching up: some airlines are suffering pilot shortages and worker tension, which is crippling some operations and making capacity growth difficult. If those struggles continue, capacity will have a harder time syncing with demand in 2018.
