Year-on-year freight demand fell for the ninth consecutive month in July, according to the latest figures from the International Air Transport Association (IATA).
Cargo demand—measured in freight tonne kilometers—dropped 3.2% in July, compared to the same month in 2018.
Freight capacity—measured in available freight tonne kilometers—grew by 2.6% year-on-year in July. It is the nine consecutive month capacity has outstripped demand.
Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences
IATA said weak global trade and the growing trade tensions between the US and China are key to the decline.
“Trade tensions are weighing heavily on the entire air cargo industry. Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes,” said IATA Director General and CEO Alexandre de Juniac.
“While current tensions might yield short-term political gains, they could lead to long-term negative changes for consumers and the global economy.
“Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences.”
Trade volumes between the US and China have fallen by 14% compared to July 2018, while global trade is 1.4% lower than a year ago.
IATA said the global Purchasing Managers Index (PMI) does not indicate an uptick in fortunes.
Its tracking of new manufacturing export orders has pointed to falling orders since September 2018. For the first time since February 2009 all major trading nations reported falling orders.
Regional performance saw airlines in Asia-Pacific and the Middle East suffer significant declines in year-on-year freight demand growth. However, African and Latin American carriers both recorded growth.
See the breakdown by region below:
- Asia-Pacific airlines saw demand for air freight contract by 4.9% in July 2019, compared to the same period in 2018. Air freight capacity increased by 2.5% over the past year.
- North American airlines saw demand decrease by 2.1% in July 2019, compared to the same period a year earlier. Capacity increased by 1.6% over the past year.
- European airlines posted a 2.0% decrease in freight demand in July 2019 compared to the same period a year earlier. Capacity increased by 4.2% year-on-year.
- Middle Eastern airlines’ freight volumes decreased 5.5% in July 2019 compared to the year-ago period. Capacity increased by 0.2%.
- Latin American airlines experienced an increase in freight demand growth in July 2019 of 3.0% compared to the same period last year and capacity increased by 2.7%.
- African carriers posted the fastest growth of any region in July 2019, with an increase in demand of 10.9% compared to the same period a year earlier. Capacity grew 17% year-on-year.