WorldACD: perishables, pharma and high-tech mitigate drop in total air cargo volume

posted on 4th March 2019 by Justin Burns
WorldACD: perishables, pharma and high-tech mitigate drop in total air cargo volume

Market analyst WorldACD has reported its air cargo industry analysis for January and said the first month of 2019 “confirmed the trend we have seen for a number of months now” – another volume drop – this time of two per cent year-on-year (YOY) – coupled with a yield drop (in USD) of 2.5 per cent.

The analyst said the smaller regions of Africa and Central & South America (C&S Am) again managed a YOY increase in outgoing business (by 3.8 per cent and 0.6 per cent, respectively), in the case of C&S Am accompanied by a YOY yield increase (in USD) of almost five per cent.

All other origin regions were down YOY. For the origins Europe and North America, the drop hovered around four per cent, but even more telling was the drop in incoming business in Asia Pacific (-6 per cent in total, -8 per cent from the origin North America, and -9.5 per cent from the origin Europe).

Origin China grew by five per cent YOY, but the destination China fell by more than 10 per cent and WorldACD said it also observed this trend in the past two months, but it was more pronounced in January due to the early Chinese New Year (5 February in 2019).

WorldACD added: “As we see it, the period preceding this day seems to have a small positive effect on outgoing business from Asia Pacific, but a more serious negative effect on incoming business.

“The countries doing well in January were Morocco and Egypt in Africa, and Ecuador and Costa Rica in C&S Am. And what to say about the United Kingdom? Whilst all individual countries in Western Europe saw a YoY drop (- 5.5 per cent in total), the UK grew by 5 per cent.

“Do we witness a pre-Brexit stocking up of goods made in Britain? Germany fared worst in Europe, with a YoY drop in outgoing air cargo of 8.7 per cent (-14.5 per cent to Asia Pacific).”

WorldACD reported on the product front that in January 2019 was a good month for certain specific cargo categories. Apart from general cargo, valuables and dangerous goods, all categories improved YOY.

The big categories of perishables and high tech grew by six per cent and four per cent, respectively, pharmaceuticals by five per cent and the much smaller group of live animals by nine per cent.

The analyst said: “Trying to find out which (groups of) companies may have best positioned themselves for a good performance in 2019, we looked who did relatively well in the ‘downturn’ of 2018, compared with the bumper year 2017.

“In spite of an overall growth between the two years of two per cent, most airline groups hardly grew: airlines from Asia Pacific reported 0.7 per cent growth, whilst those from Africa, MESA and C&S Am languished around the no-growth point.

“Only the airlines from North America (+6.3 per cent) and Europe (+3.8 per cent) beat the worldwide average growth. Remarkably, the Europeans improved their share everywhere, except in Europe itself.”

World ACD said the world’s top-20 forwarders went from a 43.2 per cent to a 43 per cent market share. But within this elite group, differences were noticeable. The 13 forwarders with a European origin grew by 0.5 per cent only, whilst the four MESA and North American forwarders did just a bit better (+1.5 per cent).

The real winners it added in 2018 were the Japanese forwarders, growing their business by 7.2 per cent, mainly driven by growth in Asia Pacific and North America. Leading forwarders in perishables, such as Kuehne + Nagel, Panalpina, DB Schenker and Newport, recorded double-digit growth (between 13 per cent and 16 per cent) in this category.

Lastly, the analyst said general sale agents (GSA) grew their business by 5.2 per cent. The two groups dominating the GSA-field (ECS and WFC), representing around 30 per cent of the total volume sold by GSAs, together grew by 3.7 per cent – less than the GSA-market as a whole. Their individual performances differed quite a bit.