Global rebound in air cargo led by Asia Pacific

According to The International Air Transport Association air freight markets worldwide showed that demand rose 8.5% in April 2017 compared to the year-earlier period.

By ·

One of the most positive developments so far this year in the air cargo sector has been the rebound in the fortunes of the Asia Pacific.

According to The International Air Transport Association (IATA) air freight markets worldwide showed that demand rose 8.5% in April 2017 compared to the year-earlier period. While this was down from the 13.4% year-on-year growth recorded in March 2017, it is well above the average annual growth rate of 3.5% over the past five years.

“Demand eased in April,” observes Alexandre de Juniac, IATA’s Director General and CEO. “Growth rates, however, are still much more robust than anything we have seen in the last six years.”

That’s good news, he adds, but it should not be taken as a message that all is well in air cargo.

“The industry’s antiquated processes need modernization,” says de Juniac. “With e-air waybill utilization topping 50% in April, progress is being made. And we must harness the momentum to drive transformational change across the way the industry operates,” said

Meanwhile, IATA says business confidence indicators remain consistently upbeat, suggesting year-on-year cargo growth will remain strong for through the summer. However, there are signs that the cyclical growth peak for air cargo has passed, particularly given that the inventory-to-sales ratio stopped falling at the end of last year.

IATA analysts note that air cargo often sees a boost in demand at the beginning of an economic upturn as companies look to restock inventories quickly. This tapers as inventories are adjusted to new demand levels. Over the whole year, air freight is headed for a healthy growth rate of 7.5%, supported by strong pharmaceuticals and e-commerce.

All regions, with the exception of Latin America, reported year-on-year increases in demand so far in 2017, but Asia-Pacific airlines’ freight volumes were especially healthy, expanding by 8.4% in April 2017 compared to the same period a year earlier and capacity increased by 3.7%. The increase in volumes reflects the strength of the order books reported by exporters across the region.

Cargo volume figures released by the Association of Asia Pacific Airlines (AAPA) confirm these observations, suggesting that business conditions continued to improve across Asian economies, in turn lending support to international trade activity.

“The broad-based expansion in global economic activity, coupled with renewed demand on selected routes, particularly between Europe and Asia, has contributed to growth in long-haul travel markets in recent months, whilst regional travel markets remain strong supported by a combination of competitive air fares and expansion in the region’s economies,” says Andrew Herdman, AAPA Director General.

 Within the same period, Asian airlines recorded a solid 9.5% increase in air cargo demand, supported by a pick-up in export orders across the region’s economies, says AAPA analysts.

Evan Armstrong president of the consultancy firm Armstrong & Associates, observes that there has been increased spot market buying of carrier capacity by air freight forwarders in Asia as well.

In his report from the recently-concluded 3PL Value Creation Asia Summit in Hong Kong, his forecast is positive:

“Air freight is expected to be slightly better than 2016 in Asia this year,” he says. 


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
Download: Material Handling Technology Survey Results
Readers are buying and replacing warehousing and distribution center software, but not before they do their own homework.
Download Today!
From the July 2017 Modern Materials Handling Issue
Shuttle and case dispensing technologies help Southern Glazer’s Wine & Spirits keep up with demand in one of the most competitive markets in the country.
Southern Glazer’s Wine & Spirits: Designed to Last
Automation: What’s at the heart of your system?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Warehouse Execution Systems (WES): The Pathway to Same-Day Fulfillment
This webinar explores the processes and technologies enabling same-day, same-hour order fulfillment using intelligent supply chain software.
Register Today!
EDITORS' PICKS
Southern Glazer’s Wine & Spirits: Designed to Last
On Long Island, the country’s premier distributor of wine and spirits turned to shuttle and case...
GE Healthcare System Report: Lean repairs
Self-driving mobile robots improve cycle times and reduce floor space at GE Healthcare’s new...

Materials Handling Innovation (and why it matters)
Every company considers itself an innovator. It’s time to include materials handling leaders in...
Thrive Market’s Startup Distribution Network
How does a fastgrowing, e-commerce startup company build out order fulfillment capabilities? Thrive...