Trade war impacting air freight demand

- A Monitor Report16 Sep, 2019 | 265 Views|-+
Geneva : The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), contracted by 3.2 per cent in July 2019, compared to the same period in 2018. This marks the ninth consecutive month of year-on-year decline in freight volumes.

Air cargo continues to suffer from weak global trade and the intensifying trade dispute between the US and China. Global trade volumes are 1.4 per cent lower than a year ago and trade volumes between the US and China have fallen by 14 per cent year-to-date compared to the same period in 2018.

The global Purchasing Managers Index (PMI) does not indicate an uptick. Its tracking of new manufacturing export orders has pointed to falling orders since September 2018. And for the first time since February 2009 all major trading nations reported falling orders.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.6 per cent year-on-year in July 2019. Capacity growth has now outstripped demand growth for the 9th consecutive month.

"Trade tensions are weighing heavily on the entire air cargo industry. Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes. 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," said Alexandre de Juniac, Director General and CEO, IATA.

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