Apparent increases in freight volumes between April 2013 and the same month this year do not reflect the slow down in world trade that has been occurring since January, according to data from the International Air Transport Association.
While international freight tonne kilometres (FTK) rose 3.2 per cent, when comparing April last year and this year, March achieved a 6.2 per cent increase. The FTK level is below those in January, indicating that there has been no rise in volumes since. The change is blamed on a slowdown in the emerging markets, which is largely driven by China. According to IATA, indicators of business confidence also slipped further in April. While IATA’s data suggests future growth, economic activity is at its “weakest pace,” for the past five months says the association, what growth there is, is buoyed by momentum in the advanced economies, which remain intact. For IATA, export orders point to expansion, and so freight’s “sluggishness” is believed to be temporary.
“Trading conditions for air freight are difficult. Overall, business activity and trade have shifted down a gear after a strong end to 2013,” says Tony Tyler, IATA director general and chief executive officer. “And this is taking its toll on growth in the air cargo sector. Developed economies are still maintaining post-recession momentum and the expectation is for a stronger finish to the year.”
IATA points to the the fact that FTKs are now above their 2011 levels. While IATA identifies China’s economic slow down as a cause of the stagnant volumes, the organisation’s own figures for Asia Pacific give a 5.2 per cent increase in FTKs for the April comparison. This brighter picture is repeated at the Association of Asia Pacific Airlines (see page two). It states that cargo demand in FTKs was up by 4.7 per cent in April, on the back of demand for Asian exports. However, IATA points to a slow down from March to April this year.
Other regions have fared worse, with Latin America and Europe reporting year-on-year FTK contractions of 6.5 per cent and 0.7 per cent, respectively. Africa did better at 2.9 per cent, with the Middle East scoring the best increases at 8.7 per cent.
However, Africa’s first four months of this year saw less growth than the same period in 2013. Worldwide, load factors slipped in April, according to IATA. Capacity has stayed flat, in a landscape that has seen belly hold growth expand at such a rate that load factors remain low despite the sort of volume increases seen in the end of 2013.