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Home » IATA reports decent air cargo growth in February; year-to-date numbers well above full-year '13
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IATA reports decent air cargo growth in February; year-to-date numbers well above full-year '13

April 2, 2014
Mark B. Solomon
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Global airfreight markets reported decent growth in February, according to the International Air Transport Association (IATA), continuing a rare favorable trend for an industry that has struggled for much of the past 13 years.

IATA, the leading global airline trade group, said today that February tonnage growth—measured in freight ton-kilometers flown—rose 2.9 percent over February 2013 totals, bringing year-to-date tonnage growth to 3.6 percent from year-earlier levels. IATA said the 2014 results continue the improvements shown toward the end of last year. For all of 2013, air freight grew a meager 1.4 percent more than 2012 levels.

Global air cargo has never returned to its growth heyday of the 1980s and 1990s as two recessions, the 9/11 terrorist attacks, soaring jet fuel prices, and profound shifts in supply chain strategy have reduced demand for the mode.

The growth in February came from Europe, the Middle East, and Latin America, IATA said. Middle East airlines posted year-on-year increases of 11.9 percent, while Latin carriers posted 6.1-percent growth. Perhaps the most surprising news came from Europe, where carriers posted a 5.5-percent increase following a 5.8-percent year-on-year gain in January, the group said. Central and Eastern European markets reported brisk growth so far this year, IATA said. Those markets have been largely immune from the fiscal and monetary crises that have swept through southern Europe and parts of the continent's western area.

North American airlines in February reported a 0.3-percent drop in year-on-year tonnage. However, IATA said strong manufacturing trends should help restore growth deeper into the spring. Asia-Pacific carriers, long the engine of global air cargo activity, reported a 0.1-percent gain in cargo tonnage. IATA said the February results could have been influenced by the Jan. 31 start of the traditional Lunar New Year in China, during which many factories close for a two-week holiday. Conversely, U.K. consultancy Drewry Supply Chain Advisors reckons that strong growth in January may have been the result of companies looking to pull orders and shipments forward into January before manufacturing capacity was idled.

MEASURED OPTIMISM
Tony Tyler, IATA's director general and CEO, said in a statement that the year-to-date results are "good cause for measured optimism" about air cargo's prospects in 2014. However, Tyler cautioned the industry not to get overly exuberant, noting that companies looking to reduce lead times and fuel and other expenses are bringing their production closer to end consumers, a trend that lessens the need for long-range supply chains and the air services that have traditionally supported them.

In addition, world trade in general has been hamstrung by the growing drumbeat of government protectionism, Tyler said. "The world's top 20 economies implemented some 23 percent more protectionist measures last year than in 2009," Tyler said. This and other factors explain why trade growth has not kept pace with current levels of domestic production, he said.

Even though air volumes are rising, pricing remains weak, according to Drewry. In a March 31 report, the consultancy said an index of rates across 21 East-West air trades declined in February for the third straight month. The drop in January, even in the face of better volumes, "underscores the weakness of a market hampered by oversupply and lackluster demand," the consultancy wrote.

Drewry said demand and pricing should improve in the coming weeks as retailers gear up for the summer apparel season and new high-tech consumer goods begin hitting store shelves. In the meantime, cargo capacity in February grew slower than demand in four of the six regions that IATA tracks. That means airlines were seeing better yields on their top-line revenue. Only in the Asia-Pacific and Africa did available capacity exceed demand, it said.

Transportation Air
KEYWORDS Drewry Supply Chain Advisors IATA - International Air Transport Association
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    Marksolomon
    Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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