The ACI (Airports Council International) trade association for airports across the world announces Airfreight volumes steadily increasing at a rate of 5.3 percent year over year.
“Airfreight numbers will likely exceed 7 percent global growth by the end of 2017, almost double 2016’s 4 percent,” ACI said.
The Middle East and Asia-Pacific regions specifically saw growths at 1.3 % and 2.26 %, while other areas saw an overall 5% rate of growth. Europe alone achieved 7.6% growth with North America trailed very closely behind at 7.4%. A strong global recovery in industrial production and trade appear to be the keys to the reason for the rapid growth between 2016 and 2017.
However, while cargo demand remains strong, there are some indicators to show that the industry may have passed its crowning for growth. According to Alexandre de Juniac, IATA’s Director General and CEO, “Tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010.”
Tracking of the inventory-to-sales ratio in the USA appears be horizontal, which would indicate that the time period when companies have historically looked to restock inventories quickly, often times supporting the improvement in numbers displayed with air cargo may have ended.
However, the cargo business continues to benefit from a strong recurring increase in volumes showing they are expected to grow by 4.5% in 2018 (Although, this is down from the 9.3% growth of 2017). Again, the shot in the arm of volumes in 2017 was primarily the result of companies needing to restock inventories rapidly in order to meet unexpected strong demand.
Overall, the stronger economic and trade conditions, including strident rises in consumer confidence, are expected to support the demand into 2018, despite the expected decline of air freight volumes from the reduction of rapid inventory stocking.