Slowing growth - goods in the shadow - a growing database
February 28, 2017
More than half of the world's air cargo in 2016 had either an origin or a destination in Asia Pacific. Given this pre-eminent share, the timing of Chinese New Year plays a considerable role in judging the year-over-year (YoY) performance in air cargo at the start of the international calendar year. This year, January 28 was the date. Many businesses, in China but also elsewhere in Asia Pacific, show a frenzied activity in the week leading up to the auspicious date, and almost total calm for a while afterwards. As last year's date was February 8, the first month of 2017 "benefited" YoY from the additional activity, but also "suffered" in the last four days: we will have the best possible YoY comparison for the start of the year once the February data will be in.
Having said that, the strong worldwide volume growth in Q4 of 2016 (+7.5% YoY) slowed down in January, dropping to 4.9% YoY. However, in DTK (Direct Ton Kilometers) the YoY growth was 6.7%. The origins Asia Pacific and North America registered volume growth of well over 7% YoY. Within the Asia Pacific region, the origin China did best with more than 16% growth YoY. As a destination Asia Pacific grew by only 2.7%, destination China even showing a YoY loss of 1.4%.
Yields showed a remarkable development. In past years, the worldwide January yield (in USD) dropped on average by 8% compared with the preceding December month. This time, the month-over-month (MoM) drop was only 2.9%. And compared to January 2016, worldwide yield lost only 0.7%. Asia Pacific showed a similar Jan vs Dec trend.
Does Chinese New Year play an overriding role in yield developments from Asia Pacific? Not necessarily: both in 2015 and 2016, Chinese New Year occurred in February, yet February-yields were higher than January in 2015, but lower in 2016.
When talking specific air cargo products, a lot of attention goes to pharmaceuticals these days: one would almost forget that Dangerous Goods (DGR) are still the larger product category of the two. Although generating a lower USD-yield (around 10% on average for the past 3 years), DGR still brings more revenues, even though pharmaceuticals have narrowed the gap over the same period. For around 1/3 of the airlines, pharma is larger than DGR, but for 2/3 it is still the other way around. As a share of total volume, pharma goes up as high as 7% for some of the largest cargo carriers, whilst DGR-share for them ranges between 5% and 7%. Europe is by far the largest origin, and 1/3 of its total DGR is carried to Asia Pacific.
WorldACD's growing database
The strength of a market database is largely determined by the quality and size of its inputs, by the amount of business covered. Data released by WorldACD are based on the total worldwide Air Way Bill data of an increasing number of airlines (presently more than 70). Taken together, these inputs constitute the world's largest database on air cargo markets. Total business reported for Q4 2016 to WorldACD was 35% higher than the total business reported into the database of our main competitor (NB: the comparison is based on a report published by this competitor). Thanks to recent additions to its roster of airlines, WorldACD has now also become the prime source of information for Latin America. Our database is the most comprehensive source for each individual continent, supporting the new types of business intelligence we create for the industry.