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Air cargo continues its lacklustre performance, WorldACD reports

Lacklustre performance of the air cargo industry continued in July and there is a trend towards larger shipments so far this year, according to WorldACD Market Data.

The market data analyst also said in its latest monthly report that the worldwide yield dropped slightly to $1.88 last month, 0.6 per cent lower than in June, but still 12.2 per cent higher than in July 2017.

In July, there was limited year-on-year (YOY) growth both in volume with 0.5 per cent and in direct ton kilometres (DTK) with growth of 0.8 per cent.

WorldACD noted when DTKs grow more than volume that means cargo has shifted to longer haul markets and give the small different of 0.3 percentage points, the average distance between origin and final destination of air cargo shipments in July hardly increased YOY.

The DTK-trend since January 2018 also shows that the average distance between origin and destination still grows, but much less so this year than in previous years.

WorldACD reported volumes from the origins Africa and Europe contracted YOY in July (-8.3 per cent and -1.3 per cent, respectively). Latin America kept growing (+9.5 per cent), whilst volumes from other areas hardly changed.

The destinations MESA and Europe were the only ones showing more than one per cent YOY growth in July.

For the year so far, Latin America is the fastest growing origin region (+11.6 per cent) and Europe the fastest growing destination (+5.6 per cent). Volume growth for the first seven months of 2018 was 3.3 per cent YOY, whilst DTK growth for the year so far fell to 4.1 per cent YOY.

In the same period, the weight of the average shipment increased by 1.9 per cent YOY. The number of shipments above 1000 kg grew much faster YOY (+4.8 per cent) than the number of shipments in the smaller weight breaks (growth varying between -0.9 per cent and two per cent).

The YOY growth percentage for the USD-yield was higher the further up you go in weight breaks: the smaller the weight, the smaller the yield growth percentage. Shipments over 1000 kgs saw larger yield increases (+17 per cent YOY) than smaller shipments (growth increasing from nine per cent for 0-50 kg to 14 per cent for 500-1000kg).

WorldACD said that the YOY increase in fuel prices may play a role here, as the increase in absolute fuel cost, when factored in as a percentage of total yield change, weighs more heavily on the (lower yielding) larger shipments.