IATA says air cargo trading conditions are still challenging

Date Added: 6 July 2023

IATA says air cargo trading conditions are still challenging
 
In spite of  the news from IATA that global air cargo markets showed weak market conditions in May 2023, we continue to have a strong presence in the global airfreight market and offer an array of expedited import and export services through our subsidiary Davies Turner Air Cargo.

We note that IATA has released data showing that global demand, measured in cargo tonne-kilometers (CTKs), fell 5.2% compared to May 2022 (-6.0% for international operations).

Meanwhile, it added that capacity, as measured by available cargo tonne-kilometers (ACTKs), rose 14.5% compared to May 2022, primarily driven by belly capacity which increases as demand in the passenger business recovers. Capacity is now 5.9% above May 2019 (pre-pandemic) levels. 

IATA identified a number of key factors influencing demand. 

It says that the global manufacturing Purchasing Managers Index (PMI) indicates an annual contraction of 1.4% in new export orders and a decrease of 5.2% year-on-year in production PMI. This suggests a cooling in global manufacturing demand. Global goods trade decreased by 0.8% in April, due to macroeconomic challenges and supply chain constraints. Trading conditions appeared to favour maritime cargo as demand for container shipping contracted by 0.2% while air cargo demand weakened by 6.3% year-on-year. 

The global supplier delivery time PMI increased to 54.5 in May, up from its low of 35 in October 2021, indicating shorter delivery times and some relief for supply chains. However, this is also a sign of weaker global goods trade demand.

“Trading conditions for air cargo continue to be challenging with a 5.2% fall in demand and several economic indicators pointing towards weakness. The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo,” said Willie Walsh, IATA’s Director General.

In the IATA/CASS league table for 2020, Davies Turner Air Cargo was the UK’s highest placed independent freight forwarder, measured by CASS airline tonnage. As such, you can be assured that our experienced staff are always on hand to provide support as you negotiate the tricky air cargo market.

If you have a need to move your freight internationally and are looking for cost effective, expedited air freight services, you can find more information about what Davies Turner Air Cargo can offer by contacting aircargo@daviesturner.co.uk or visiting https://www.daviesturner.com/air-freight