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AMSTERDAM: September 01, 2017. Air cargo analyst WorldACD says recent industry developments run the risk of becoming monotonous with July another month of double-digit, year-over-year (YoY) growth. However is China showing signs of slowing down?

"As Sonny Bono wrote 50 years ago in his famous, yet rather repetitive song: "the beat goes on, yes, the beat goes on". It is not too difficult to imagine that quite a lot of people in our industry do not mind the monotony at all, after a number of years in the doldrums.

"Underneath the continuing worldwide trend, however, we noticed a movement worthy of mention. But first the overall picture for July.

"Overall YoY volume growth was 11.8 percent worldwide, caused by above average originating growth from Europe (14.2 percent), MESA (13.5 percent) and Asia Pacific (13 percent), and below average figures for other regions.

"The southern hemisphere originating traffic of South America and Africa did rather poorly (3.6 percent and 2.6 percent growth respectively). MESA (Middle East & South Asia) and Asia Pacific were the fastest growing destination areas (14.9 percent and 13.3 percent increase respectively).

"General cargo continued to increase faster (+12.6 percent) than the other product categories (+9.0 percent), with the exception of pharmaceuticals (+17.6 percent).

"In terms of yields, July saw a considerable worldwide YoY-yield increase, +7.8 percent in US$. The Asia Pacific region contributed heavily to this impressive figure by scoring a 13.2 percent US$-yield increase for business originating in the area.

"Month-over-month (MoM), however, worldwide yields did not increase: measured in US$ they remained stable while in € they lost 2.3 percent. Yield-wise, North America was a good destination to send goods to: while incoming volume remained the same as in June, US$-yields for exports to the region were slightly better MoM, and increased 15.6 percent YoY.

"The surprising July developments relate to China. For the first time this year, the world's air cargo engine sputtered a bit (relatively speaking, that is). Originating China traffic saw double-digit growth (averaging 19 percent) for the first six months of 2017, but fell to 8.0 percent in July.

"Air cargo needed the compensation of high growth from places like Hong Kong, Germany, India, the United Kingdom, Singapore and the Netherlands, to achieve its July-growth of 11.8 percent YoY.

"By the way, incoming traffic in China continues to boom at +21.0 percent YoY.

"The China situation is also reflected in our Direct Ton Kilometers (DTK) measure for July. When the DTK percent growth surpasses the volume percent growth, it means the average distance between shipment origin and destination has increased.

"In the first half of the year, DTK growth indeed easily outpaced volume growth, but not in July when DTKs rose 11.9 percent and volumes increased 11.8 percent. Given the mostly long-distance character of air cargo ex-China, the country's relative weakness contributed to this deviation from the trend.

"With the worldwide inputs of well over 70 airlines in its database, let us have a preliminary look at some insights on carrier groups and their shares in specific air cargo products (such as perishables, pharmaceuticals, electronics and dangerous goods). We compare the year-to-date with the same period in 2016:

"From Africa, the African carriers increased their share in specific products, to the detriment of carriers from Europe and MESA (Middle East & South Asia).

"The Europeans compensated by gaining share of the ex-Asia Pacific market - in which the home carriers lost some ground. The latter was also true for Europe-originating traffic, where European carriers lost, and MESA carriers gained considerable market share.

"The MESA carriers also look particularly strong in their own region, continuing to control the majority of specific product transport originating in their area.

"Last but not least carriers from the Americas increased their share in specific products from their region. Here it is noteworthy that carriers from the Americas have a much higher overall share from Latin America than from North America."

WorldACD Market Data

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