In the last month of 2019, worldwide air cargo decreased by 1.7 per cent year-on-year, the smallest YoY decrease since January 2019, but a decline nevertheless.
The year ended with a mixed picture, not with the positive figures the air cargo world had hoped for, says WorldACD Market Data in their latest analysis.
The results for the full year 2019 were not impressive: Worldwide revenue, measured in USD, fell by 11.7 per cent compared to the top year 2018, while it did not grow compared to 2017 either. The main reason was a YoY yield drop of 7.6 per cent, as total weight fell by 4.4 per cent, says WorldACD.
And although pharmaceuticals and vulnerable goods (including high-tech) both showed growth of around 8.5 per cent in volume, their yield drops – though not as steep as in general cargo – were a cause for concern for the airlines.
High-Tech & Other Vulnerable Goods increased by +13.3 per cent YoY, while Pharma & Temperature Controlled Goods rose by +12.6 per cent YoY. In perishables, flowers did best (+3.5 per cent YoY), but fruits & vegetables suffered (-7.9 per cent).
Origin Europe took the hardest hit in 2019, losing more than 16 per cent of its revenues (in USD) of the previous year, equal to -12 per cent in EUR, with Germany accounting for half of Europe’s woes.
As reported throughout the year, the smaller regions of Africa and Latin America fared better than the larger regions in the Northern hemisphere. While Asia Pacific and Europe outbound was slightly better than inbound, the opposite was the case for North America. This brings us to the main story of the past year, says WorldACD: The influence of Trump’s trade wars on the world’s trade flows.
Many have attributed (part of) the disappointing 2019 results for air cargo to the worsening US–China relationship, but trying to establish where the consequences of the trade war were felt most, is not all that easy.
Total China inbound dropped by 6.0 per cent, but China outbound increased by 2.7 per cent YoY in total, increased by 2.8 per cent to Europe, and dropped by only 0.3 per cent to the US. “That certainly looks a whole lot better than the worldwide drop of 4.4 per cent YoY,” WorldACD notes.
But it is not the whole story, as one of China’s great gateways, Hong Kong, lagged behind considerably: Overall export by air fell by 5.5 per cent, but the decrease in business to Europe and the US was biting much harder (-10.8 and -14.4 per cent respectively).
The US on the other hand, saw total outbound decrease by 5.3 per cent YoY, and lost less than that in its air cargo business to China (-4.9 per cent), but more to Europe (-5.7 per cent). And inbound US stood at -4.0 per cent YoY.
Turning to flight information, WorldACD notes there have been quite a lot of “upbeat messages” lately, based on this information. “As we all know, operational (flight) data should be ‘handled with care’ when trying to read into them how specific markets are developing,” WorldACD says.
It cites the example of Japan in Q4 of 2019. Based on WorldACD data for freight carried on flights ex-Japan, one sees a continuing YoY improvement over the previous three quarters. But, when considering market data (based on origin and destination from AWB’s), the picture is drastically different, it says.
Japan’s YoY market performance was worst in Q4 2019. In other words, flights ex-Japan may have done better, but not with business originating in Japan. As a matter of fact, an increase in cargo originating in China, carried on flights ex-Japan, is an important reason for the difference observed, the data analytics company says.