CSCMP's Supply Chain Quarterly
December 09, 2018
Forward Thinking

IATA says global airfreight on track for best year since 2010

Gains should continue into 2018, group says, citing solid November results.

Global airfreight volumes rose in November by 8.8 percent over year-earlier totals, putting the transport mode on track to have its best year since 2010, the International Air Transport Association (IATA), a global airline trade group, said yesterday.

Final December figures are not in. However, the month is seasonally strong for airfreight as demand picks up for rush shipments near the holidays.

Unlike 2010, which proved to be a one-year surge following the Great Recession, the 2017 gains should extend into 2018, IATA executives said. A broad-based global upturn, elevated consumer confidence, and secular growth in international e-commerce demand all should support continued growth, the association said.

Exporters in Europe, China, and Japan are reporting brisk activity, due in large part to solid demand from U.S. businesses and consumers, IATA said.

Airfreight capacity rose by only 4 percent in November, marking the 16th consecutive month that demand has exceeded cargo space, according to IATA data. This has led to a steady run-up in freight rates, a trend likely to be amplified in the near term, as Chinese production ramps up ahead of the shuttering of factories for the Lunar New Year, which in 2018 begins Feb. 16.

According to Manel Galindo, CEO of Freightos WebCargo, a unit of the online cargo marketplace Freightos, in recent years the pre-Chinese New Year squeeze pushed up air cargo rates from China to the U.S. from US$10 to US$12 per kilogram, a little less than double the normal rate of US$6 to US$7 per kilogram. This year, however, shippers transporting large and urgent shipments before the holiday can expect to pay rates as high as US$20 per kilogram, Galindo said.

All six world reporting regions saw year-on-year gains, according to IATA data. Airlines in the Asia-Pacific—the largest region by market share—posted gains of 8.1 percent. North American and European carriers reported gains of 9.6 percent and 9.9 percent respectively, IATA said.

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