A look back at the cargo market - IATA Q2/2014 cargo chartbook synopsis


One has to take the good with the bad, or in this case a little disappointing, with the IATA Cargo E-Chartbook Q2/2014 from the International Air Transport Association (IATA). 

As seen in recent quarters, a positive sentiment remains in certain areas, but some situations are still causes for concern by the cargo heads queried in April 2014 for IATA’s latest report.

The upswing in the global economy has had the most positive knock-on effect for the industry so far this year. European and US consumers remain confident while rates of expansion are higher in the emerging markets. Both the US and Euro economic areas are expecting growth. However, stronger economic growth has not generated the expansion of international trade that could be expected; mainly due to on-shored production. Experts are also keeping their eye on the tightening fiscal policy in both the US and Europe as well as a slight slowdown in growth from Latin American and African countries.

While air freight markets have maintained the growth seen at the end of last year, there has been no increase in levels. That can be compared though to a balanced demand environment. Even though world trade growth picked up and manufacturing activity has slightly risen, neither factor is enough to raise demand. Demand drivers have been positive: Consumer confidence in China remains stable, and there has been an increase in capital expenditure intentions from companies in the UK.

Looking to capacity, new aircraft deliveries are set to expand the existing wide body fleet by almost 8 percent in 2014, which means pressure on aircraft utilization could deepen. Air freight rates remain stable and sea freight rates appear to be declining. Even though air freight yields seem to have stabilized, they are still weak, and there has been no additional improvement in load factors over recent months. Jet fuel prices have also remained stable, even though the stable price is still relatively high. 

Overall air freight shipping is showing a solid improvement over last year’s results and that development is set to remain through the end of the year. Cargo heads are planning for slower growth in traffic volumes and no change in yields.

Cargo market analysis chartbooks are published quarterly on the IATA website.

Text by Jacy Meyer



Published June 23, 2014

Category: Market updates