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Freight demand: Africa posts largest year-on-year increase

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Freight demand: Africa posts largest year-on-year increase

Africa posted the largest year-on-year increase in demand of all regions in October 2017; with freight volumes rising 30.3 per cent.

This was contained in the International Air Transport Association’s (IATA).

data for global air freight markets, which showed that demand measured in freight tonne kilometers (FTKs), rose 5.9 per cent in October 2017 compared to the year-earlier period.

IATA stated that capacity increased 9.2 per cent, adding that during the same period international freight volumes grew by 28.5 per cent.

This is more than three times the five-year average growth pace of 9.4 per cent.

Demand, according to IATA has been boosted by very strong growth on the trade lane to and from Asia, which increased by more than 67 per cent in the first nine months of the year.

This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance.

While cargo demand remains strong, several indicators show that we may have passed the growth peak.

The inventory-to-sales ratio in the US is tracking sideways, indicating that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended. The new export orders component of the global Purchasing Managers’ Index (PMI) is stable. And the upward trend in seasonally adjusted freight volumes has moderated.

Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.

“Demand for air freight grew by 5.9% in October.  And tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010,” said Alexandre de Juniac, IATA’s Director General and CEO.

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