August 2017: Double digit growth again - most trends continue
September 30, 2017
With a worldwide volume increase in August of 12.9% year-over-year (YoY), air cargo continued its recent trend by again showing double-digit growth. At 14.6%, YoY growth in Direct Ton Kilometers (DTK's) was even higher, underscoring another trend, namely that the average distance between point of origin and point of destination of air cargo shipments keeps growing, just like the average shipment size. Revenues (in USD) increased with more than 23%, helped by an average YoY yield increase of 15 USD-cents. This uncommonly high yield increase was no doubt helped by the strengthening of the Euro against the dollar.
In the year so far, the origins Asia Pacific and Europe have outperformed other regions consistently. But August brought robust growth from North America as well. These three regions each posted more than 15% YoY volume growth. In North America, the only 'outlier' was domestic air cargo, which hardly grew, another quite persistent trend. From the origin Africa, we noted a YoY volume contraction (-4%), caused purely by declining business to its main markets Europe and the Middle East. But southern hemisphere markets like South America and Indonesia (two other origins hardly contributing to this year's growth spurt), had reason to rejoice with a YoY growth in August of 11% and 21% respectively.
Most of the top air cargo origins in the world, such as Hong Kong, Germany, parts of China, Japan, Korea, the United Kingdom and the Netherlands, contribute to the booming air cargo market as one would expect from these markets. France, Australia and the United Arab Emirates, however, are performing well below the average for 2017, thus seeing their relative position under some threat. With a growth of more than 25% for the year up till now, Vietnam and Belgium are moving up in the rankings, Vietnam showing growth across the board and Belgium clearly profiting from its focus on improving its pharma transport infrastructure.
Talking about specific air cargo sectors, this month WorldACD rolled out a new version of its product data information, which now recognizes eleven different product categories instead of the previous six. This makes for more in-depth views of what is happening in air cargo markets. Some of the new insights are:
- Specific product information now accounts for 30% of total air cargo information;
- Growth in the transport of high tech & other vulnerable goods clearly outpaces the year-to-date growth in general cargo: 18% vs. 12.4%. Pharmaceuticals was the only other category growing faster than general cargo;
- Of all specific cargo products, 25% of the volume originates in Asia Pacific, but 30% of the revenues (in USD);
- In the transport of perishables in 2017 compared to 2016, the following picture emerged: growth was mainly driven by the flower markets, which increased by 9.9%, and thus did much better than the markets in Fruits & Vegetables (+5.9%) and Fish & Seafood (+4.9%);
- The two most important flower markets show very different fortunes in 2017: whilst flower transport in the Colombia-USA market increased by 18% YoY, the market from Kenya to The Netherlands contracted by 1.6%. Yields fell slightly in both.