WorldACD: Modest growth in October but US/China trade war impact not taking effect

posted on 3rd December 2018 by Justin Burns
WorldACD: Modest growth in October but US/China trade war impact not taking effect

WorldACD Market Data has reported in October that worldwide air cargo volumes showed a modest year-on-year (YOY) growth of two per cent after the YOY decline in September.

The analyst said three regions recorded a surge in both outgoing and incoming air cargo: Asia Pacific performed best up 4.2 per cent and 2.7 per cent, respectively. For Europe, the corresponding percentages were 0.5 per cent and 2.7 per cent and for MESA (Middle East & Souh Asia) 3.4 per cent and 0.1 per cent.

In the other areas, the picture it said was mixed: Africa and North America grew in incoming but contracted in outgoing traffic, whilst Central & South America showed the opposite trend. Both In October and in the YTD, the highest region-to-region growth was seen from Central & South America to Asia Pacific (+33 per cent in October), mainly driven by the export of seafood.

WorldACD said the worldwide air cargo yield moved up to USD 1.99 in October 2018, seven per cent higher than in October 2017, and three cents higher than in September 2018. Measured in Euro’s, the worldwide yield increased by 10 per cent YOY.

These changes occurred against the backdrop of a two per cent volume increase YOY, a loadfactor decrease of 1.3 percentage points YoY and a load factor increase of 2.8 percentage points month-over-month (MoM).

In terms of yields, expressed in USD, the origin Asia Pacific recorded the largest YOY increase (10.4 per cent), mainly caused by a 14.3 per cent yield growth in the market from Asia Pacific to North America. The origins Africa and North America increased yields by 8.5 per cent and 6.8 per cent, respectively.

The air cargo industry is closely watching whether and how the trade war between the USA and China will affect trade streams and WorldACD compared the markets China-USA and USA-China, which it said may help to perform a “reality check on the many stories going around about the effects of the US-China tug-of-war”.

It found, the year 2018 through October, China’s total outbound air cargo grew YOY by 1.9 per cent and the USA’s by 4.9 per cent (total worldwide growth was 3.1 per cent). China to USA and USA to China were up by three per cent and one per cent, respectively. China to USA grew faster than China outbound worldwide, whilst the opposite was true for the USA to China.

Focusing on the last two months on record, in September China to USA was up by 2.1 per cent YOY, whilst USA to China was up by 0.7 per cent. But the October-comparison is more telling: China to USA up by 4.5 per cent, and USA to China down by the same percentage. Taking the totals for the two months for both directions together, WorldACD said it noted a YOY growth of 1.9 per cent, well above the world average of 0.9 per cent.

The 4.5 per cent YOY growth in air cargo from China to the USA, was largely fueled by a rise in the transport of vulnerable /high-tech goods. This sector grew by a significant 30.5 per cent YOY, which it said was “much more than the usual seasonal upswing” and “more likely a case of US businesses stocking up before tarriffs really start to bite”.