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October a special month for airfreight

GENEVA: December 01, 2017. IATA says airfreight demand rose 5.9 percent in October compared to the same month in 2016 as capacity increased 3.7 percent – the 15th consecutive month where demand has exceeded supply. Amsterdam-based research company WorldACD says October was indeed special:

"The latest worldwide air cargo figures - as reported by 75 airlines to WorldACD - confirm what followers of the air cargo industry had noticed already: the month of October 2017 was special.

"Monthly volumes were higher than ever, whilst revenues (when measured in euro) peaked as well. Although revenues measured in US$ did not reach the heights scaled in the October months of the years 2010 - 2014, it should be noted that oil prices in that period were almost twice as high as they are today.

"With the recovery under way for more than a year now, the 10 percent increases seen earlier this year are now behind us. However, for the fourteenth month in succession, the industry showed a year-over-year (YoY) growth well above 5.0 percent, easily outpacing the growth in world trade. And the records set in October are almost certain to be broken when November-figures will be in.

"Worldwide volumes in October 2017 increased by 6.9 percent YoY. This figure, impressive in itself after the strong October 2016 performance, was dwarfed by a YoY revenue growth (in US$) of 20.5 percent.

"This very strong showing was driven in particular by the following factors:

1. an impressive yield growth from Europe and the Middle East & South Asia, in particular from India;
2. high volume growth from Europe, from and to North America, and to Central & South America; and
3. higher fuel cost factored into the revenues.

"Looking at the Top-20 origin countries, we noticed a more than average YoY volume growth in parts of the U.S: (Atlantic South +19.1 percent and Midwest +14.4 percent), Vietnam (+16.6 percent), Australia (+15.9 percent), Japan (+12.3 percent), the UK (+10.4 percent), Spain (+8.6 percent) and Germany (+7.6 percent).

"Lagging behind were such diverse origins as Taiwan (-8.8 percent) , the Netherlands (+1.5 percent), China East (+2.9 percent) and India (+3.7 percent).

"In the various categories of specific cargo products, the transport of pharmaceuticals had the largest YoY revenue growth (+31 percent), thanks to a healthy volume increase of 19 percent, coupled with an increase of more than 10 percent in yields that are already more than 50 percent higher than average air cargo yields.

"Developments in the two largest product categories were quite different. The transport of high tech. and vulnerable goods thrived (both volume and yields increased by more than 11 percent); but fruits and vegetables were less in demand, at least when comparing with October 2016.

"The edibles' volumes decreased by 2.5 percent YoY, while their average yields hardly gained ground. Compared with the previous month, however, this sector did very well, with a revenue increase of 16.3 percent over September 2017.

"The trend in DTK (Direct Ton Kilometers) growth for this year seems quite stable. Whenever the growth in DTK's is larger than the growth in kilograms, the average actual distance between origin and destination of shipments has increased.

"In October 2017, the difference was smaller than in previous months (+6.9 percent in kilograms vs. +7.4 percent in DTK's), as the traditional long haul markets from East Asia grew less than average this month.

"For the year as a whole, we expect DTK's to outgrow volume by 1.0 percentage point. This means that longer haul markets in 2017 continued to grow more than shorter haul."

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