According to the latest data released by the International Air Transport Association, the global air freight market experienced subdued demand over July 2018. With a recorded freight growth of 2.1%, IATA reports that this is the slowest pace of growth seen since May 2016 and significantly lower than the five-year average growth rate of 5.1%.
IATA noted that freight capacity, which is measured in available freight tonne kilometres (AFTKs), grew by 3.8% year-on-year in July 2018. The growth marked the fourth instance in five months that capacity outpaced demand.
Commenting on the global market’s performance, Alexandre de Juniac, IATA’s Director General and CEO, shared: “July demand for air cargo grew at its slowest pace since 2016. We still expect 4% growth over the course of the year, however the downside risk has increased.
The tariff war and increasingly volatile trade talks between the world’s two largest trading nations – China and the US – are rippling across the global economy putting a drag on both business and investor sentiment. Trade wars only produce losers.”
The global aviation trade association also noted a handful of factors that may influence the continued slow growth of the market. This includes the inventory re-stocking cycle that typically peaks at the beginning of the year, a decline within the export order books of manufacturing firms across the world, and finally, longer supplier delivery times in both Asia and Europe.
In terms of region, IATA noted that Middle East-based carriers posted the fastest growth of any region in July 2018. Reporting an increase in demand by 5.4% compared to the same period a year prior, capacity for the region also grew by 6.3% over the same time frame.
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