Global air cargo down 4% this year
The global air cargo market saw a 4% year-on-year decline in the four weeks to 2 February, according to the latest ‘dynamic load factor’ market intelligence from CLIVE Data Services. The dynamic load factor fell two percentage points relative to last year to 65%.
CLIVE’s ‘first-to-market’ analysis each month consolidates data shared by a representative group of international airlines operating around the world. Based on both the volume and weight perspectives of the cargo flown and capacity available, it gives the air cargo industry the earliest possible barometer of market performance each month.
It said the four-week data to 2 February “largely reflects the influence of the earlier Chinese New Year; but CLIVE is also closely monitoring the impact of the coronavirus on air freight volumes, which will be clearly evident in its data reports over the coming weeks”.
CLIVE’s managing director, Niall van de Wouw said: “At face value, the 4% drop in global air cargo in the weeks between 6 January and 2 February appear to be quite a setback relative to the growth numbers seen in the last 3 months of 2019. But looking at the data in more detail tells a more nuanced picture.
“The Chinese New Year holiday started this year on 25 January, one week earlier than in 2019. By our estimates, the fact that this is holiday is celebrated in such major air cargo origins as China, Hong Kong, South Korea and Singapore, pushed the overall growth number down by around -3% for the start of the year. This implies that the ‘normalised’ global market saw a decline of -1%.”
He said for a regional holiday to have such an impact on global volumes, the drop must be quite dramatic, as CLIVE’s latest intelligence demonstrates. In the last week of January, volumes from China to Europe, relative to the same week in 2019, dropped by 66%. Subsequently, the dynamic load factor of westbound flights from China dropped from close to 90% to 74%.
The reason for the load factor not dropping further is due to airlines cutting capacity by 44% relative to the same week last year, CLIVE noted, adding that most of this fall in capacity was caused by a reduction of freighter services in anticipation of the weaker demand.
“While the industry traditionally anticipates lower demand during Chinese New Year, the big unknown now is the impact of the coronavirus at the start of a year where there was previously slight optimism for a modest recovery in air cargo volumes,” said van de Wouw. “We have already seen airlines suspending passenger services in response to the virus, and now it’s a case of wait and see.
“The impact of the coronavirus on cargo volumes out of China will become clearer in the weeks to come when the factories reopen and their supply chains are brought up to speed again. How quickly that will happen – and what knock-on effects it has for global air cargo industry – will be a strong indicator for the year ahead.”
CLIVE’s ‘dynamic load factor’ analysis attempts to update the way air cargo capacity usage is traditionally measured to reflect the modern reality of lower-density air freight. It is based on the fact that airlines’ cargo capacity nearly always ‘cube out’ before they ‘weigh out’ as a result of an aircraft’s higher capacity density (available kgs per cubic meter) than the average density of the goods moved by air. Consequently, CLIVE says, traditional load factors, based only on weight, underestimate how full planes really are, and thus give a distorted picture of how the industry really is performing.
© 2019 Worldfreightrates News