Airline Cargo Manangement November 2019 Digital Issue

Airline Cargo Management November 2019

Air cargo continues to face strong headwinds from the intensifying trade war between the US and China, as well as weakness in some of the key economic indicators and rising political uncertainties worldwide. Global trade volumes are 1% lower than a year ago, according to IATA.

The US and China are recording pronounced losses and sharply declining trade volumes. In the United States, the trade war has brought struggles for farmers and manufacturers and higher prices for consumers. In other countries it has also caused economic damage, though some countries have benefited from increased manufacturing to fill the gaps. It has also led to stock market instability. The governments of several countries, including China and the United States, have taken steps to address some of the damage.

The trade war has caused a significant deterioration in China–United States relations as the countries exchanged tit-for-tat tariffs for over a year, with President Trump threatening more to come, with no resolution in sight.

Alexandre de Juniac, IATA’s CEO noted that the impact of the US-China trade war on air freight volumes was the clearest yet in August. Year-on-year demand fell by 3.9%. Not since the global financial crisis in 2008 has demand fallen for 10 consecutive months. And with no signs of a détente on trade, we can expect the tough business environment for air cargo to continue.

Notwithstanding such bright spots, the overall outlook remains bleak. Even if China and the US bury the hatchet, it will take time to restore confidence and growth. Falling business confidence continues to weigh on US carriers.

Freight demand has contracted for the largest routes between Asia and North America, where seasonally adjusted volumes are down almost 5% compared to this time last year. China Airlines suffered a 2.9% drop in cargo revenues in the January-May period, as load factors dropped 4.9 points.

On a more positive note, our esteemed readers will notice that the magazine has a brand-new look. The refreshed new design reflects a new direction for our publication along with our new owners, Real Response Media which acquired the assets of Air Transport Publications (ATP) in September. These are exciting times for us, our clients and our readers as we continue to grow and connect the air cargo and logistics market.