May’s improving volumes go south, rough air ahead: CLIVE

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Global industry data for May supports the continued small recovery of air cargo volumes, but a fall in demand over the last two weeks of the month may signal more challenging times ahead as airlines return capacity to the market.

Having only recently stated that the global air cargo industry had stabilised, but was by no means in good shape, the latest week-by-week analyses by CLIVE Data Services for May unfortunately pinpoints a slightly deteriorating condition as the month progressed.

May was less bad than April

The month of May 2020 was not as bad for the global air cargo industry as April 2020 with CLIVE’s data last month suggesting the industry has passed the (initial) bottom. After a -37 per cent decline in volumes year-on-year in April, the corresponding figure for May of -31 per cent shows a slight upward curve and, measured alongside a capacity decline of -42 per cent versus last year, the pressure on capacity remains high.

Consequently, CLIVE’s ‘dynamic load factor’, based on both the volume and weight perspectives of cargo flown and capacity available, increased month-on-month from 67 to 69 per cent.

But, just as March and April were a story of two tales, so is May, CLIVE says. March ended far worse than it started, while for April it was the other way around. Looking at the most recent weeks, it is clear that May ended weaker than it started.

Volumes reduced in the last two weeks of May

After a series of week-over-week growth in volumes, a decline set in during the week of 18-24 May, followed by an even stronger decline for the last week of May, the data analytics company says.

During these last two weeks, the capacity growth rate versus the previous week was higher than the volume growth, thereby reducing the dynamic load factor for the first time in weeks by 0.5 per cent. This easing of pressure on capacity had a downward impact on freight rates on major tradelanes, as recently reported by the TAC Index.

“Looking at the last 12 weeks, it is clear to see that market volumes remain erratic and that this will continue for the foreseeable future,” says CLIVE’s managing director, Niall van de Wouw.

“This is one of the few certainties we have at the moment. We can see some dark clouds gathering and this is a cause of concern for air cargo. This is why, in navigating these uncertain times, weekly data becomes not only relevant to decision-making, but crucial.

“We do not see signals yet that the increase in capacity is being met by growth in demand. With the announcements of increases in passenger schedules, global air cargo revenues may suffer ‘collateral damage’ of more capacity returning to the market,” he adds.

CLIVE’s air cargo industry intelligence consolidates data shared by a representative group of international airlines operating to all corners of the globe. Based on both the volume and weight perspectives of the cargo flown and capacity available, it uses weekly analyses to give the air cargo industry the earliest possible barometer of market performance each month.

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May's improving volumes go south, rough air ahead: CLIVE
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May's improving volumes go south, rough air ahead: CLIVE
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Global industry data for May supports the continued small recovery of air cargo volumes, but a fall in demand over the last two weeks of the month may signal more challenging times ahead as airlines return capacity to the market.
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AsiaCargoBuzz.com
AsiaCargoBuzz.com
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