Freight markets contract in July
Despite Middle Eastern carriers recording a 16 percent, year-over-year, increase in freight demand in July, global cargo markets shrunk 3.2 percent, year-over-year, last month, according to International Air Transport Association statistics. In a press release, IATA partially attributed this decline to a comparison with a “relatively strong” July 2011, but said global trade growth is still sluggish.
Nowhere is this sluggishness more evident than in the Asia-Pacific. Freight carriers in this region saw volumes plunge 7.6 percent, year-over-year, in July, on a 4.3 percent, year-over-year, capacity drop. These declines, which represent the biggest year-over-year losses seen in any region in July, are even more dramatic than those witnessed in the Asia-Pacific in April and June. In fact, IATA said in the press release, freight carriers in this region have recorded “virtually no growth” in cargo volumes since the fourth quarter of 2011.
Carriers in North America and Europe have also contended with lower-than-average freight volumes recently. Cargo demand in both of these regions dipped 3.6 percent, year-over-year, in July, although European carriers reported a more marked contrast between capacity and demand.
Airlines in Europe offered 0.9 percent more capacity last month than in July 2011, while North American carriers perfectly matched capacity with demand, offering 3.6 percent less capacity, year-over-year. Unfortunately, this decline couldn’t offset the latter region’s staggering decline in load factor, which plunged to 32.3 percent in July.
Like their North American counterparts, Latin American carriers also reported a markedly low July cargo load factor. Freight load factor in this region dropped to 35.2 in July, despite Latin American airlines raising capacity by 13.9 percent, year-over-year. Cargo demand in Latin America also slid in July, falling 5.6 percent, year-over-year.
The Middle East was the only region with any cargo gains in July, according to IATA. In addition to recording a double-digit increase in freight demand, Middle Eastern carriers boosted capacity by 11 percent, year-over-year, last month. Such gains contributed to the region’s 2 percent, year-over-year, improvement in freight load factor, which totaled 45.3 percent in July.