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Air Freight demand down 1.1% in November 2019

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Air Freight demand down 1.1% in November 2019. Image: Wikimedia/ Jonnyknoxville1
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The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), decreased by 1.1% in November 2019, compared to the same period in 2018. This marks the thirteenth consecutive month of year-on-year declines in freight volumes.

Despite the decline in demand, November’s performance was the best in eight months, with the slowest year-on-year rate of contraction recorded since March 2019. In part, November’s outcome reflects the growing importance of large e-commerce events such as Singles Day in Asia and Black Friday.

While international e-commerce continues to grow, overall air cargo demand continues to face headwinds from the effects of the trade war between the US and China, the deterioration in world trade, and a broad-based slowing in global economic growth.

“Demand for air cargo in November was down 1.1% compared to the previous year. That’s better than the 3.5% decline posted in October. But it is a big disappointment considering that the fourth quarter is usually air cargo’s peak season. Looking forward, signs of a thawing in US-China trade tensions are good news. But trading conditions at present remain very challenging,” said Alexandre de Juniac, IATA’s Director General and CEO.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.9% year-on-year in November 2019. Capacity growth has now outstripped demand growth for 19 consecutive months.

Regional Performance

Airlines in Asia-Pacific, Latin America and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in November 2019, while North American carriers experienced a more moderate decline. Europe and Africa were the only regions to record growth in air freight demand compared to November 2018.

 NOVEMBER 2019 (% YEAR-ON-YEAR) WORLD SHARE1 FTK AFTK FLF (%-PT)​2 FLF (LEVEL)​3
Total Market
100.0%
-1.1%
2.9%
-2.0%
49.6
Africa
1.6%
19.8%
13.7%
2.1%
40.4%
Asia Pacific
35.4%
-3.7%
1.8%
-3.1%
53.8%
Europe
23.3%
2.6%
4.0%
-0.8%
56.9%
Latin America
2.7%
-3.4%
-2.3%
-0.5%
40.3%
Middle East
13.2%
-3.0%
2.6%
-2.9%
49.7%
North America
23.8%
-1.1%
3.3%
-1.8%
41.3%

1- % of industry FTKs in 2018 2- Year-on-year change in load factor 3-Load factor level

Asia-Pacific airlines saw demand for air freight contract by 3.7% in November 2019, compared to the year-earlier period. This was the sharpest drop in freight demand of any region for the month. Capacity increased by 1.8%. The US-China trade war has significantly affected the region, with demand on the large Asia-North America market down 6.5% year-on-year in October (latest available data). However, the thawing of US-China trade relations and robust economic growth in key regional economies are positive developments.

North American airlines saw demand decrease by 1.1% in November 2019, compared to the same period a year earlier. Capacity increased by 3.3%. Slower growth in the US economy and trade tensions with China have affected demand. However, positive progress in trade negotiations between both countries highlighted by the ‘phase one’ deal is a positive development.

European airlines posted a 2.6% increase in freight demand in November 2019 compared to the same period a year earlier. Better than expected economic activity in the third quarter in some of the region’s large economies helped support demand. Capacity increased by 4.0% year-on-year.

Middle Eastern airlines’ freight volumes decreased 3.0% in November 2019 compared to the year-ago period – a significant improvement over the 5.7% decrease in October. Capacity increased by 2.6%. Against a backdrop of operational and geopolitical challenges facing some of the region’s key airlines, seasonally-adjusted freight volumes in the region have continued a modest upwards trend, which is a positive development for the region’s carriers. However, escalating geopolitical tensions threaten the regions’ carriers in the period ahead.

Latin American airlines experienced a decrease in freight demand in November 2019 of 3.4% compared to November 2018. Various social and economic headwinds in the region’s key economies have impacted the region’s air cargo performance. Capacity decreased by 2.3% year-on-year.

African carriers posted the fastest growth of any region in November 2019, with an increase in demand of 19.8% compared to the same period a year earlier. Strong trade and investment links with Asia contributed to the positive performance. Capacity grew 13.7% year-on-year.

Air Freight

Air France-KLM, Delta and Virgin Atlantic launch trans-Atlantic Joint Venture

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Air France-KLM, Delta and Virgin Atlantic launch trans-Atlantic Joint Venture. Image: Wikimedia/ Aleksandr Markin
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Air France-KLM Cargo, Delta Air Lines Cargo and Virgin Atlantic Cargo are promising cargo customers more connections, greater shipment routing flexibility, improved trucking options, aligned services and innovative digital
solutions with the launch of their expanded trans-Atlantic Joint Venture (JV).

The new partnership, which represents 23% of total trans-Atlantic cargo capacity or more than 600,000 tonnes annually, will enable the airlines to offer the best-ever customer experience, and a combined network of up to 341 peak daily trans-Atlantic services – a choice of 110 nonstop routes with onward connections to 238 cities in North America, 98 in Continental Europe and 16 in the U.K.

More choice and convenience for customers

Customers will be able to leverage an enhanced network built around the airlines’ hubs in Amsterdam, Atlanta, Boston, Detroit, London Heathrow, Los Angeles, Minneapolis, New York-JFK, Paris, Seattle and Salt Lake City. It creates convenient nonstop or one-stop connections to every corner of North America, Europe and the U.K., giving customers the added confidence of delivery schedules being met by a wide choice of options.

The expanded JV enables greater co-operation between the airlines, focused on delivering world class customer service and reliability on both sides of the Atlantic achieved through co-located facilities, joint trucking options as well as seamless bookings and connected service recovery. The airlines already co-locate at warehouses in key U.S., U.K. and European airports, and will review opportunities to co-locate further at more airports around the globe.

Adriaan den Heijer, Executive Vice President of Air France-KLM Cargo: “We are very excited to welcome Virgin Atlantic Cargo to the successful trans-Atlantic Joint Venture between Air France-KLM Cargo and Delta Cargo. The combined network means more choices and value for our customers as
we align our services to enable seamless transfers and further streamlining of transport times. This enhanced joint venture offers the most and best trans-Atlantic options ever in the cargo industry.”

Expertise in Specialised Products

The four airlines will leverage their expertise in the transportation of specialised products, including end-to-end GDP and IATA CEIV quality compliance for pharmaceuticals, supported by dedicated
teams and facilities across the globe. The JV will allow the airlines to provide customers with a diversified product range to best suit their individual requirements.

“This announcement is just the first step in the journey,” said Shawn Cole, Vice President – Delta Cargo. “Our customers can expect additional benefits as we evolve our partnership further to deliver best-in class customer experience and operational reliability, with differentiated products and services that are tailored and developed to make it easier to do business with the four airlines.”

Ease of doing business

Customers will be able to book their shipments with knowledgeable local teams and by using new digital solutions designed to reduce duplication and drive efficiencies as a result of greater connectively between the airlines’ systems. Alongside the development of a growing choice of selfservice technology options, customers will continue to enjoy the support of co-located customer service centres to enhance their cargo delivery experience.

Virgin Atlantic Cargo’s Managing Director, Dominic Kennedy said: “Our great partnership with Delta has already enriched the benefits we offer to our customers. With our expanded JV with Air FranceKLM Cargo, we are even more excited about the benefits we will be bringing for our customers as we
work with like-minded partners to deliver greater value across our outstanding trans-Atlantic network.”

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Air Freight

Emirates SkyCargo’s freighter service to Chinese mainland sees strong demand

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Emirates SkyCargo’s freighter service to Chinese mainland sees strong demand. Image: Emirates SkyCargo
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Emirates SkyCargo is seeing good demand for the import and export of cargo into the Chinese market, as China reopens for business after the Lunar New Year holidays. The air cargo carrier operates freighter services to Guangzhou (CAN) and Shanghai (PVG), having resumed these scheduled services after a planned hiatus over the traditionally low-traffic period over the holidays.

“Emirates SkyCargo continues to support trade and movement of goods into the Chinese market and is committed to supporting China’s diverse distribution needs and supply chains through our freighter operations to Shanghai and Guangzhou. We are a market oriented carrier and are ready to fulfil the growing needs of our customers. We will constantly review our operations to ensure that we are able to support the Chinese market by deploying adequate capacity through our freighters,” said Hiran Perera, Emirates Senior Vice President, Cargo Planning & Freighters.

“We also continue to carry bellyhold cargo on our double daily flights between Beijing and Dubai,” he added.

The flights to China are operated on Emirates’ Boeing 777 freighter aircraft offering a cargo capacity of around 100 tonnes for exports and imports on each flight. Commodities being currently transported on the freighter flights include perishable food items, pharma, medical supplies and other general cargo.

Emirates SkyCargo has been continually operating freighter services to Hong Kong and in addition to scheduled services, the carrier also recently operated a charter flight to carry relief materials.

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Air Freight

Airlines and Posts Cooperate globally for a sustainable and reliable cross-border Airmail network

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Airlines and Posts Cooperate globally for a sustainable and reliable cross-border Airmail network. Image: Flickr/ Beck Gusler
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The International Air Transport Association (IATA) and the International Post Corporation (IPC) have today signed a Memorandum of Understanding (MoU) to reinforce cooperation between the two organizations. The aim for both IATA and IPC is to promote the development and expansion of safe, secure, accessible and high-quality airmail and air cargo services to help their respective members provide quality solutions aligned to consumer needs.

“International e-commerce is growing at around 20% per year, leading to rapidly changing market conditions for airlines and posts. Ensuring customers get their packages on time while safety and security in postal air transport is maintained is the main priority for posts and air transport operators alike. Cooperation across the supply chain is a must and our MoU with IPC is an important step toward strengthening our activity in this area,” said IATA’s Director General and CEO, Alexandre de Juniac.

“For more than 10 years, the cooperation between airlines and postal operators has enhanced processes and increased visibility of airmail transport. With this agreement, we want to further strengthen our ties and identify further opportunities for cooperation and joint developments. Both of our sectors can win from a reinforced cooperation in terms of competitiveness and quality of service. Ultimately, this agreement will benefit consumers through more reliable and faster delivery of cross-border mail and packets transported by air,” said Holger Winklbauer, CEO of IPC.

IATA and IPC intend to work together on seven specific areas:

  1. Improving the security, handover, carriage, delivery and settlement of airmail between postal operators and air carriers. This includes e-commerce, economic and commercial matters.
  2. Developing and maintaining industry standards and procedures as well as services and solutions for both physical flows and electronic data interchange relating to airmail.
  3. Aligning existing services and solutions, along with developing new ones to ensure harmonized compatibility and efficient application of resources.
  4. Finding technology-based standards and solutions for piece level tracking in airmail.
  5. Addressing volumetric challenges, through initiatives such as Air Packet Box, and allocation and booking procedures for airmail.
  6. Developing regional onboarding initiatives and global campaigns on airmail process optimization and standardization.

Improving the involvement of ground handlers and other industry stakeholders on matters concerning airmail.

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