IATA: Air cargo is a victim of US-China trade war

0
352
IATA director general and CEO, Alexandre de Juniac

Trade wars are having an adverse impact on air cargo, with US-China trade volumes down 14% this year, says the International Air Transport Association (IATA).

Air freight demand measured in freight tonne kilometres (FTK) contracted 3.2% in July, marking the ninth consecutive month of year-on-year declines.

It was impacted by weak global trade and the intensifying trade dispute between the US and China. Global trade is down 1.4% but US-China is down 14%.

The global Purchasing Managers Index does not indicate an uptick, with new manufacturing export orders pointing to falling orders since September 2018. For the first time since February 2009, all major trading nations reported falling orders.

Freight capacity measured in available FTK rose by 2.6% in July, marking the ninth consecutive month when it has outstripped demand.

Alexandre de Juniac, director general and CEO of IATA says that trade tensions weigh heavily on the air cargo industry, and higher tariffs are not only disrupting trans-Pacific supply chains but worldwide trade lanes.

He says: “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.”

Only Africa grew strongly in July, up 10.9% helped by increasing links with Asia. Africa only represents 1.6% of global air cargo.

Asia-Pacific contracted 4.9% due to the US-China trade war and weaker manufacturing conditions.

North American consumer demand could not outweigh US-China trade tensions, pushing demand down 2.1%.

European airlines fell 2% due to weaker German manufacturing and Brexit uncertainty.

The Middle East was down 5.5% due to escalating trade tensions and slowing in global trade.

Latin America also grew, with demand up 3% due to economic improvements in Brazil, though other countries including Argentina remain a cause for concern.