IATA reports modest air freight growth for May

The International Air Transport Association (IATA) has reported that air freight demand continued to grow “modestly” in May.

In a statement issued yesterday (4 July), IATA said that the data for global air freight markets showed that “demand, measured in freight tonne kilometers (FTKs), rose 4.2% in May, compared to the same period the year before”. This was slightly down from the 5.2% (revised from 4.1%) growth in annual demand recorded in April.

Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 6.2% year-on-year in May 2018. This was the fourth month in a row that capacity growth outstripped demand growth.

IATA continued: “After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018. In IATA’s mid-year industry outlook, 2018 freight growth was revised downwards to 4.0% (from the previously forecasted 4.5% in December 2017).”

IATA said that there wre three indications that growth will continue at a slower pace:

• The re-stocking cycle which required quick delivery to meet customer needs is over
• The new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is at a 21- month low
• Global trade appears to be softening as trade tensions increase

“We expect air cargo demand to grow by a modest 4.0% in 2018. That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade. We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers,” said Alexandre de Juniac, IATA’s Director General and CEO.