A look back at the cargo market – IATA Q3 cargo chartbook synopsis


According to IATA, Q3 showed declining yields and raising costs for the cargo market. In September Finnair Cargo saw some signs of a new spark.

According to the International Air Transport Association’s Cargo E-Chartbook for Q3 2012, the growth in trade volumes has been slowing and business confidence worldwide has overturned the slightly promising trend seen earlier in the year.  Air freight demand did not meet expectations, yields declined and oil prices once again rose. 

Not surprisingly, the continued lack of global economic growth is affecting the air freight market worldwide. In 2012, global economic growth is expected to be just over 2%, slightly lower than 2011, according to the IATA. Growth can be seen in certain parts of the world; emerging markets such as Asia Pacific and Latin America continue to considerably outpace Western economies. The US and Japan are expected to improve on 2011 performance, however, economic growth in the Euro area is likely to contract overall in 2012.

On the whole, the news is a litany of mostly negative, tempered with signs of hope. While air freight volumes have stabilized; signs of improving demand during H1 2012 have now stalled. It’s interesting to note that improvement was seen slightly more in smaller markets, rather than on major trade lanes. Freight-only carriers have benefited more from the stabilization in air freight demand. Business confidence has started to decline in recent months compared to the beginning of the year, but world trade continues to expand, although at a slowing rate of growth. Also, freight load factors were at a low point at the end of 2011 and have remained stable throughout 2012.

The competition also hasn’t altered much compared to previous quarters. Goods transport from the EU to Asia by sea continues to increase, while air cargo along the same route remains weak. Interestingly, sea freight markets are showing growth in shipping volumes worldwide, except in Europe. This indicates that a slowdown in growth in world trade is concentrated in the Euro area.

So what can be expected in the coming months? The IATA believes the outlook for cargo is somewhat pessimistic. They spoke with heads of cargo in July 2012 and they implied a more negative view towards the immediate future. It’s not unexpected however, when declines in business confidence and slowing growth in world trade are factored in. Overall, the IATA believes cargo traffic to increase only moderately.

Cargo market analysis chartbooks are published quarterly on IATA web pages.

Finnair Cargo in Q3:
July and August were still challenging for business, but September cargo volumes indicated a new spark. Compared to H2 of 2011 we have had more stable loads in both belly and freighter cargo, despite the challenging world economy. The usual Q4 peak is likely to be shorter than in normal years, but we share IATA's view that next year might bring some moderate growth.
We are currently working  on developing an optimal network for the upcoming year that will support areas with likely increases in cargo demand.

Mikko Turtiainen, Vice President Global Sales & Marketing, Finland 

Text by Jacy Meyer

Published November 23, 2012

Category: Market updates