Growth in air cargo demand has slowed to a 22 month low as global trade has softened, the International Air Transport Association (IATA) reports.
Freight tonne kilometres (FTK) increased by 1.7 per cent in March, five percentage points lower than in February and the slowest pace of growth in 22 months.
The association says the slowdown is principally due to the end of the restocking cycle, during which businesses rapidly increase their inventory to meet unexpectedly high demand, and a softening of global trade is also evident.
Capacity in available FTK fell to 4.4 per cent, lower than the 6.3 per cent increase in February and also the first time in 20 months that capacity rose faster than demand.
IATA director general and chief executive officer, Alexandre de Juniac says: “It’s normal that growth slows at the end of a restocking cycle. That clearly has happened. Looking ahead we remain optimistic that air cargo demand will grow by four to five per cent this year.
“But there are obviously some headwinds. Oil prices have risen strongly, and economic growth is patchy. The biggest damage could be political. The implementation of protectionist measures would be an own-goal for all involved—especially the US and China.”
Growth has slowed in all regions of the world except Latin America, which grew by 15.5 per cent as it continues to recover helped by better performance of the Brazilian economy.
FTKs in Africa fell by 3.4 per cent in March though last year was particularly strong so IATA says it is too early to suggest this is the start of a negative trend.
Asia Pacific grew by 0.7 per cent with export orders in Japan and Korea have fallen in recent months and the region remains exposed to the impact of protectionist measures.
Europe rose one per cent with the stronger Euro and a softening export orders in Germany partially explaining the results.
The Middle East grew by 0.8 per cent, which IATA says is consistent with the general weakening in regional performance over recent months.
North American volumes expanded 3.9 per cent with the US inventory-to-sales ratio rising in 2018 indicating the boost to cargo growth from restocking is over.
