The traditional end-of-year boost to global freight demand has failed to materialise amid sluggish economic growth, geopolitical tensions and the trade dispute between the United States and China, the International Air Transport Association (IATA) says.
The IATA monthly cargo report showed global freight tonne kilometres (FTK), a measure of demand, fell 3.5 per cent in October, compared with the prior corresponding period.
Further, with capacity, measured by available freight tonne kilometres (AFTK) rising 2.8 per cent in the month, the freight load factor dropped to 47.7 per cent, a decline of 2.7 percentage points from 50.4 per cent in the same month a year earlier.
“Over the past year, air cargo has suffered from the effects of the trade war between the US and China, the deterioration in global trade, and a broad-based slowing in economic growth,” IATA said.
IATA chief executive and director general Alexandre de Juniac said the air cargo market was set to record one of its worst annual results in many years.
“Air cargo’s peak season is off to a disappointing start,” de Juniac said in a statement on Wednesday (European time)
“Demand is set to decline in 2019 overall – the weakest annual outcome since the global financial crisis.
“It has been a very tough year for the air cargo industry.”
Among the regions, the IATA report said Asia Pacific airlines had the second largest drop in demand in October at 5.3 per cent, behind only the airlines of the Middle East, which experienced a six per cent contraction in freight demand.
“The US-China and South Korea-Japan trade wars have negatively affected the region,” IATA said of the Asia Pacific.
“And the disruption to operations at Hong Kong International Airport – the largest cargo hub in the world – continues to impact activity.
“However, the thawing of US-China trade relations and robust economic growth in key regional economies are positive developments.”
IATA said airlines in the Europe, Latin America and North America also experienced weaker freight demand in October.
The only bright spot was Africa, where FTKs were up 12.6 per cent compared with the prior corresponding period. IATA said strong trade and investment links with Asia contributed to the performance.