July demand down 4.2%, year on year, although special products grew 3.5%, continuing to outperform general cargo, which saw tonnages down by 7.4%.
US-China trade tensions continued to hit air cargo volumes in June and July, with a warning that the “worst effects” of the US increase in tariffs on Chinese imports may see an “even deeper dive” in airfreight tonnages from August.
Air freight market analyst WorldACD said that first seven months of a “dismal year” for air cargo volumes saw a “relatively positive” July 2019 with a 4.2% year on year (YoY) decrease, one of smallest monthly declines since January – compared with an 8.9% fall in June. However, a reduced number of weekends in July compared with June may have skewed the numbers.
WorldACD also reported that air freight’s special products saw a volume growth of 3.5%, and so continued to outperform general cargo in July, which saw tonnages down by 7.4%.
“Upheaval in international relations has been the order of the day this year. And even though the worst effects of the US-instigated trade war(s) may still have to reach air cargo, the general sentiment in the world is obviously not doing the industry a whole lot of good,” observed WorldACD.
It added: “Now that consumer goods have also been targeted for tariff increases, air cargo figures as from August may well take an even deeper dive than shown so far. However, as we all know that averages never tell the whole story, performances at regional, country and trade lane level may remain widely divergent… with some countries much harder hit than others.”
For example, airfreight revenues in US dollars saw Latin America down by 0.9% in July, but Brazil took a massive hit with a fall of 18.1%. Europe fell by 14.8% in July but Germany – the continent’s airfreight powerhouse – saw air cargo revenues nosedive by 22.5%.
A further caveat is that aviation fuel prices in July were 10% lower than a year earlier.
WorldACD said that in terms of dollar revenues so far this year, Asia Pacific and Europe are the “big losers”, with YoY declines of 10.9% and 14.8%, respectively, for outgoing, while the declines for inbound cargo were 11.4% and 10.8%, respectively. By comparison, the US saw a 6% YoY decline outbound and an 8.5% decrease inbound.
Separate data for June, released by Airports Council International (ACI) Asia-Pacific, continued the gloomy mood music. Regional airfreight markets continued to deteriorate during June, with a 6.5% fall for Asia-Pacific hubs and a 7.1% decline for Middle East gateways.
China’s Hangzhou (HGH) airport, serving the Yangtze River Delta region, was the only hub to post a positive growth rate (up by 4.2%) among the top 20 air freight hubs, said ACI. The growth was driven largely by the increased handling capacity and network expansion of express couriers.
ACI observed that regional Asia Pacific airfreight fell by 5.9% in the first half of 2019 while the Middle East witnessed a decline of 2.7%, adding: “The escalating trade tensions between China and the US continued to put pressure on the exports and manufacturing activities in the region.”
Source: Lloyd’s
