Airfreight growth has slowed to the lowest pace since May 2016, well below the five-year average growth rate, the International Air Transport Association (IATA) reports.
In July, freight tonne kilometres (FTK) rose 2.1 per cent year-on-year, with IATA commenting that the temporary grounding of Nippon Cargo Airlines’ fleet possibility exaggerating the slowdown in growth.
The association says the three factors indicating slower growth will continue were the inventory re-stocking cycle requiring quick delivery to meet customer needs ended at the beginning of the year; weaker export order books particularly in Europe from February, and China and Japan also falling; and longer supplier delivery times for manufacturers in Asia and Europe indicating less need for the speed of airfreight.
IATA director general and chief executive officer, Alexandre de Juniac says: “July demand for air cargo grew at its slowest pace since 2016. We still expect four per cent growth over the course of the year, however the downside risk has increased.
“The tariff war and increasingly volatile trade talks between the world’s two largest trading nations – China and the US – are rippling across the global economy putting a drag on both business and investor sentiment. Trade wars only produce losers.”
Freight capacity is also increasing faster than demand, with available FTKs growing 3.8 per cent in July, marking the fourth time in five months that capacity growth outstripped demand.