17 January 2017
After a torrid few months, international air freight has begun to show signs of improvement, with September seeing global volume growth of more than 5%, year over year (YoY), for the first time in two years, according to new figures from WorldACD.
Combined with a further worldwide average yield improvement over previous months and industry sources claiming that October will be even better, the Amsterdam-based analyst said: “One could be forgiven for thinking that the industry shows signs of improving health.”
It said the origin region Europe contributed most to the positive figures, with a YoY volume increase of 8%. Asia Pacific followed closely behind with a 6% increase, although Latin “remains in the doldrums”.
At a country level, the US and China stood out as the most important growth markets, both inbound and outbound. “Also, it seems that one of the traditional 'engines' of the end-of-year growth, Hong Kong, has started its climb towards the November peak somewhat earlier than in previous years,” WorldACD added.
This observation about the early peak this year confirms other reports by Lloyd’s Loading List, based on information from forwarders and carriers.
Meanwhile, with a 1.4% increase, month over month (MoM), average worldwide air freight prices or “yields” – expressed in US dollars – also boosted September revenues for carriers.
WorldACD added “one slight note of caution”, noting that when making YoY comparisons, it is important to check whether the months compared have the same number of 'strong' and 'weak' cargo days. This year, September counted one Friday more than last year.
WorldACD estimated that this extra strong day caused the 5.2% growth to be inflated by a full 1 percentage. “But that should not diminish the upbeat feeling September has generated!” it added.
Looking on a quarterly basis, the analyst said the third quarter of 2016 has been better than the second: YoY volumes were up 3.2%, while yields – after having slipped in Q2 – slightly increased.
Carriers based in Europe showed the highest growth (+4.6%), followed by those from Asia Pacific (+3.2%) and the Middle East (+2.9%).
WorldACD noted that it had recently also introduced the concept of DTKs, or Direct Tonne Kilometres – the weight carried multiplied by the shortest distance between origin and destination of a shipment. It created this measure to get a better understanding of the more traditional growth figures reported by some other analysts, which sometimes use freight tonne kilometres (FTKs) as their measure.
“In measuring both the changes in kilogrammes and the changes in DTKs, we are able to see exactly how the ratio of short- and long-haul changes,” WorldACD observed. “That is not the case when measuring only in FTKs, since that measure combines changes in markets served with changes in operational patterns.” For example, a shift in direct versus indirect carriers operating in a particular market changes the FTKs without changing the volume on the origin and destination (O&D) concerned, WorldACD explained.
In Q3, worldwide kilogrammes YoY increased by 3.2% whilst DTKs grew by 4.3%. Thus, growth was larger in long-haul traffic than in short haul.
“Actually, the latter stagnated almost completely, with the exception of intra-Asia Pacific traffic, which increased by 5%,” WorldACD observed. “The long-haul markets from Europe to Asia Pacific and from Asia Pacific to North America were particularly fast growing: +9% and +10% respectively.
“Interestingly, we also noted that business originating in (or destined for) carriers’ hubs actually did not grow at all, meaning that indirect transport (business via carriers’ hubs) was responsible for the entire YoY growth in Q3,” WorldACD added.
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