June sees storm clouds darkening: WorldACD

WorldACD H1

The first half of 2019 ended with the month of June showing a worldwide decrease of almost 9.0 per cent in air cargo transported, causing a further widening of the gap with 2018.

June 2019 at a glance
Total Chargeable Weight: -8.9 per cent year-over-year (YoY); – 6.8 per cent month-over-month (MoM)

General cargo: -12.5 per cent YoY, Special cargo -0.4 per cent YoY

Direct Tonne Kilometers (DTK’s): – 8.6 per cent YoY

Yield stood at USD 1.77 (-6.3 per cent YoY, no change MoM) • The yield in EUR stood at 1.57

The cargo load factor dropped by 3.3 percentage-points YoY, and by 2.4 MoM

High-Tech & Other Vulnerable Goods (largest category special cargo) increased by 3.7 per cent YoY, while the 2nd largest (Pharma & Temperature Controlled Goods) rose by 5.3 per cent YoY

Combined with a YoY yield (in USD) decrease of 6.3 per cent, the airlines suffered a YoY revenue decrease of almost 15 per cent in June, according to WorldACD Market Data in its latest analysis.

Only High Tech (+3.7 per cent), Pharmaceuticals (+5.3 per cent), Flowers (+4.6 per cent) and Fish/Seafood (+4.5 per cent) resisted the onslaught, but the first two of these categories paid a price for their volume growth in the form of yields falling more than volume increased, WorldACD says.

Looking at the June performance on the various continents, only the origin Africa showed a modest YoY volume increase of 1.2 per cent, coupled with a 0.6 per cent yield increase in USD. Europe found itself at the other end of the scale: The 12.5 per cent YoY decrease in volume, combined with a yield drop of more than 10 per cent in USD (and almost 8.0 per cent in EUR), made for a dark picture. In Germany the clouds got even darker, WorldACD adds grimly.

Of the larger regions, Asia Pacific reversed the trend somewhat: It suffered most in May, but least in June, with a YoY volume drop of 7.4 per cent for outgoing, and of 9.0 per cent for incoming air cargo.

“The further we get into 2019, the poorer the results: The second quarter contributed most to the sharp reversal of air cargo’s fortunes this year compared with 2018. Last month, we made the comparison with the first part of 2017, since that could give a more ‘realistic’ view, given the extraordinary growth in 2018, and also – to be honest – to report some good news as well,” data analytics company says.

But this time around it says that comparison will no longer work, as the comparison between H1-2019 and H1-2017 now shows a slight decrease as well (-0.6 per cent worldwide, with North America the exception among the larger regions, with an outbound weight growth of 2.0 per cent).

What does this say about H1-2019 vs H1-2018? The total weight reported fell by 4.8 per cent. The three largest areas fared worst: Asia Pacific -5.6 per cent, North America -5.5 per cent, Europe -5.3 per cenWorldACD H1bt.

Only five ‘sub-regions’ showed growth from their territory: In order of size Australasia (0.4 per cent), East Africa (2.6 per cent), Northern Europe (10 per cent), North Africa (3.0 per cent) and Central Asia (20.1 per cent). As destinations, North, West and East Africa increased (between 3.1 and 8.0 per cent), and so did the Gulf Area and Central Asia, albeit minimal. The special cargo categories doing well in June (see above), are also the ones doing well during H1-2019.

Did the trade war between China and the US have an effect on air cargo between the two countries in H1-2019 compared to H1-2018? WorldACD figures would suggest that was not the case. Business between the two ‘supermarkets’ is not worse off than the air cargo business elsewhere. Both volume and revenue development from China to the US were completely in line with the drop in China’s total exports by air.WorldACD H1a

From the US to China the picture was the same for overall cargo sales, but with one important difference: The volume drop to China was twice as big as the general volume drop from the US, but this was totally offset by a strong yield increase. In both directions, most carriers based in North America did markedly better than most of their Northeast Asian and Chinese counterparts, it adds.

June sees storm clouds darkening: WorldACD
Article Name
June sees storm clouds darkening: WorldACD
The first half of 2019 ended with the month of June showing a worldwide decrease of almost 9.0 per cent in air cargo transported, causing a further widening of the gap with 2018.
ECS Group

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