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Air Freight Price Recovery Accelerates in JulyTuesday, September 02, 2014 > 11:23:45
(Lloyd’s Loading List – Will Waters)
Global average air freight prices recorded a second consecutive monthly increase in July, with rates up 2.9%, year on year, according to industry analyst WorldACD.
With volumes growing by 6%, year on year, WorldACD recorded total year-over-year revenue growth (USD) of almost 9% in July among more than 50 airlines in the WorldACD database and their transactions with over 15,000 forwarders.
The yield increase in July follows a slight increase recorded in June of 0.9%, year on year, their first monthly increase in US dollar terms for two and a half years. This followed a price drop of just 0.2% in May, meaning that “the US$-yield remained stable for the third month in a row, another phenomenon not seen for quite a while”, WorldACD observed.
“Of course, structural problems continue to trouble the sector, making rejoicing premature. But in a harsh business environment, who wouldn’t be pleased with the market growth in 2014 so far,” the organisation added.
Of the total volume growth in July, two thirds came from the Asia Pacific area, once again the engine for growth. The markets between Asia Pacific and North America showed the strongest recovery with a 25% revenue growth for both directions combined.
Europe “remained true to its recent past” WorldACD said: “Its outbound business again showed much less volume growth than the worldwide average, but a higher yield growth (+6% in US$, +2.4% in euro terms).
In inbound traffic, the three largest markets continued to do better than the three smaller markets of Africa, Latin America and the Middle East & South Asia (MESA).
The July figures follow a solid recovery for air freight in the first half of 2014, with IATA’s freight tonne kilometre (FTK) figures estimating first-half global air freight growth of 4.1%, while WorldACD reports a slightly higher figure in terms of tonnage figures this year of 4.8%, completing 12 consecutive months of year-on-year global growth.
Preliminary airport data from Airports Council International (ACI) points to around 3.7% global air freight growth in the first half of 2014, including 4.5% growth of international and 1.8% domestic growth, continuing and building upon the growth trend of the second half of last year.
ACI figures suggest that for the 12 months to 30 June, the world’s airports achieved average year-on-year growth of 2.8% overall, with 3.2% for international and 1.7% for domestic traffic. This contrasts with full calendar year 2013 figures of just 0.7% for the world’s main airports last year, or 0.9% for international traffic.
The Association of Asia Pacific Airlines reported that air freight demand continued to pick up in July among its member airlines, with demand growth exceeding capacity expansion in July for third consecutive month.
Asia Pacific airlines handled 6.4% more cargo in July than a year earlier, compared with a 3.2% increase in offered freight capacity, causing average load factors to increase by two percentage points to 65.3%. The AAPA attributed the improvement to “encouraging growth in demand for exports from major regional manufacturing hubs”.
Continuing improvements in load factors are expected to translate in to rate increases. Drewry’s East-West Air Freight Index indicated that pricing on the 21 main east-west trades was up by around 7% in June, year on year.