IATA optimistic on air cargo despite current challenges

Date Added: 14 June 2022

IATA optimistic on air cargo despite current challenges

Through our subsidiary, Davies Turner Air Cargo, we have a strong presence in the expedited airfreight arena and note that IATA has expressed optimism that the air cargo market will begin to improve in the months ahead, despite the current market challenges.

In its latest market update, IATA said that air cargo demand dropped by 11.2% year on year in April, while cargo load factors slipped by 5.2 percentage points on a year ago to 51.6%, and capacity was down by 2%.

The fall in demand is the largest since August 2020 and load factors are at their lowest level since February 2020, although still above pre-Covid levels.

The airline association said that the drop in demand was fuelled by the war in Ukraine leading to a fall in cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players.

Meanwhile, China’s zero-Covid policy and associated lockdowns led to capacity challenges due to flight cancellations because of labour shortages.

“Global goods trade has continued to decline in 2022, with China’s economy growing more slowly because of Covid-19 related lockdowns (among other factors),” IATA said.

“The lockdowns have brought much of the world’s largest port, Shanghai, to a standstill. Supply chain disruptions due to the Ukraine-Russia conflict are also adding to the downward pressure on trade.”

New export orders, a leading indicator of cargo demand and world trade are now shrinking in all markets except the US, the association added.

Despite the challenging conditions, IATA director general Willie Walsh sounded a note of optimism.

“The combination of the war in Ukraine and Covid-19 lockdowns in China have pushed up energy costs, intensified supply chain disruptions, and fed inflation,” Walsh said.

“The operating environment is challenging for all businesses, including air cargo. But with China easing lockdown restrictions, there is cause for some optimism and the supply/demand imbalance is keeping yields high.”

As the UK’s highest placed independent freight forwarder in the IATA/CASS league table for 2020, measured by CASS airline tonnage, Davies Turner Air Cargo welcomes enquiries about our global airfreight services. Just contact aircargo@daviesturner.co.uk or visit https://www.daviesturner.com/air-freight

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