Capacity is now regularly outpacing demand growth among air cargo, according to a report from the International Air Transport Association (IATA), as freight growth continues to lag.
In June 2018, freight tonne kilometers (FTKs) rose just 2.7 percent over the previous period last year, and the first half of 2018 as a whole stands at 4.7 percent – less than half the growth rate of 2017. This has been driven by the end of a rapid build up cycle in early 2018, a structural slowdown in global trading conditions and the temporary grounding of the Nippon Cargo Airlines fleet in June.
“Air cargo continues to be a difficult business with downside risks mounting,” Alexandre de Juniac, IATA’s director general and CEO, said. “We still expect about 4 percent growth over the course of the year. But the deterioration in world trade is a real concern. While air cargo is somewhat insulated from the current round of rising tariff barriers, an escalation of trade tension resulting in a ‘reshoring’ of production and consolidation of global supply chains would change the outlook significantly for the worse. Trade wars never produce winners. Governments must remember that prosperity comes from boosting their trade, not barricading economies.”
Freight capacity, meanwhile, ticked upward to 4.1 percent by the end of June. That capacity growth has been outpacing demand since March.