Air cargo out of the doldrums but still faces risks, says IATA
The International Air Transport Association's airline-industry forecast for 2014-18 shows that international freight volumes are expected to increase at a compound annual growth rate (CAGR) of 4.1 per cent over the next five years.
Emerging economies, particularly in the Middle East and Africa, will be the fastest-growing markets.
“Air cargo remains as vital to the global economic system as ever. This year, more than [US]$6.8 trillion worth of goods, equivalent to 35 per cent of total world trade by value, will be transported around the world by air. So it is welcome to see a forecast for a return to growth for the air cargo sector after several years in the doldrums,” said Tony Tyler, IATA’s director general and chief executive officer.
“An average of more than 4-per-cent growth for the next five years would be a marked improvement on the performance of recent years. Since 2011, for example, growth in freight tonnes has averaged just 0.63 per cent per year.”
Nevertheless, despite the positive picture, the overall risks to the economic outlook, and therefore to air freight, remain towards the downside.
Trade protectionism is a constant danger. According to the World Trade Organisation, between November 2013 and May 2014 alone, 112 new trade-restrictive measures were enacted by governments in the Group of 20. Geopolitical concerns, volatility of oil prices, and competition from rail and sea could also affect this forecast. The air-cargo industry certainly cannot afford to be complacent, Tyler said.
To enhance air-cargo competitiveness, the industry is aiming to cut average transit times by up to 48 hours by 2020. To achieve this, air freight is modernising its processes, improving quality and reliability, and widening the range of services offered. A key component of modernised processes is the e-freight project, which will render air shipments paperless. As a first step, the industry is adopting the e-Air Waybill. Last month global e-AWB penetration reached 19.4 per cent, meaning the 2014 industry target of 22 per cent is within reach.
The United States, China and the United Arab Emirates will each be adding more than a million additional tonnes of freight by 2018 compared with today. The UAE will have replaced Germany as the third-largest market.
The fastest-growing international routes will be between the Middle East and Asia, at 6.2 per cent per year. Within the Middle East (4.6 per cent), North America to South America (3.9 per cent), and Europe to Southern Africa (3.8 per cent) will also grow strongly.
Significant volume imbalances will continue. The imbalance in flows from Asia to North America is estimated to be 1.1 million tonnes in 2018, and from Asia to the Middle East the imbalance will be 600,000 tonnes.
