November 2019: towards a less negative end of the year

December 28, 2019

November 2019 at a glance:
Total Chargeable Weight: -2.5% year-over-year (YoY); +0.4% month-over-month (MoM).
General cargo -5.5% YoY, Special cargo +4.2% YoY.
Direct Ton Kilometers (DTK’s): -2.5%
Yield stood at USD 1.85 (-10.7% YoY, +4.1% MoM).  The yield in EUR stood at 1.67.
The cargo load factor dropped by 2.1 percentage-points YoY, but increased by 2.4 MoM.
High-Tech & Other Vulnerable Goods increased by +14% YoY, whilst Pharma & Temperature Controlled Goods rose by +5% YoY. Perishables in total increased by 2% YoY: flowers did best (+6% YoY) and meat did worst (-2%).

(See www.worldacd.com/yields for more yield developments)

Load factors have climbed steadily since August, improving by 2 to 2.5 %-points in each of the months September, October and November. Was that a sign of some degree of returning health for the beleaguered air cargo business?

We had to wait until the end of the year before – at last – seeing a somewhat positive trend in volumes transported. Worldwide chargeable weight was down by 6.9% YoY in August, by 5.3% in September, by 4.7% in October, but by only 2.5% in November. Does this mean we are going to end the year on a – relatively – high note? If the trend continues, the month of December may be the first month in 2019 showing no YoY decline…. But even if December YoY would turn out to be ‘neutral’, the worldwide volume for the full year 2019 will be -4.3% compared to 2018. Taking out the ‘bumper year’ 2018, the change from 2017 to 2019 will be -2.2%.

The most striking feature in the November results was the ongoing growth in China & Hong Kong: the two origins taken together for the months of October and November, increased their outgoing volumes by 4.6% compared with the year 2017 and by 5.1% compared with 2018. Main engines behind this growth are the destinations Europe and the Middle East & South Asia (MESA), but exports to North America decreased. High Tech was the fastest growing product category ex China & Hong Kong. The origin Asia Pacific as a whole, whilst more than 5% down for the year 2019, did not show a YoY decrease in November. All other origin regions except one, also showed a better YoY performance in November than in the ten months before. That one exception was Europe: -5.1% YoY for the year up till now, but -5.5% for November.
Worldwide, special cargo continued to grow, recording its highest growth in November: +4.2% YoY.

The positive outlier in Europe’s performance this year has been Northern Europe, showing an 11.6% YoY growth, largely driven by a phenomenal growth from Norway of more than 20%. Norway’s export by air consists for more than 80% of fish and seafood, 2/3 of which goes to the Asian countries. The Norwegian Seafood Council attributes this growth to an increased demand for – in particular – the healthy “fatty fish” types salmon and mackerel.

Back to China and Hong Kong for a moment: the largest kilogram increases contributing to the volume improvements in 2019, came from Apex Logistics, Kerry Logistics and Sky Dragon Logistics. Apart from DGF / Sinotrans, the world’s larger forwarders did not feature in the list of top growth forwarders in 2019.

In next month’s newsletter we will provide our definitive view of 2019, but for now it is: best wishes for a healthy & prosperous 2020 from all of us at WorldACD!

 

WorldACD has the world's largest air cargo market database. For a large number of markets, WorldACD is the prime source of cargo market information. 

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