In the August 28th cargo report, IATA said Air cargo traffic was stable in July but demand continues to be constrained by the lack of belly-hold capacity, according to the latest monthly report from IATA.
While the improvement in air cargo volumes seen in May continued into June and July, its pace appears slightly slower than expected. Some of the relevant drivers of cargo traffic exhibited stronger recoveries, and strict lockdowns have ended in most parts of the world, reducing supply chain congestion.
Figures from the airline association show that demand in cargo tons fell by 13.5% year on year in July. IATA said this is a modest improvement from the 16.6% year-on-year drop recorded in June and the 14.1% fall over the first seven months of the year.
However, cargo traffic is not increasing as fast as economic indicators suggest it should as a result of limited capacity, which in July was down by 31.2%.
The capacity decline was led by reductions in belly-hold space, down by 70.5% in July. This was, however, offset by a 28.8% increase in freighter capacity.
As a result of capacity decreasing faster than demand, load factors improved by 11.5 percentage points to 56.4%.
While economic indicators have diverged from air cargo performance over the last few months, there are some positive signs for the sector. IATA went on to say that new export orders statistics –a leading indicator for air cargo –show that CTKs should continue to improve in the coming period.
IATA director general and chief executive Alexandre de Juniac said: “Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments.
“That said, air cargo is much stronger than the passenger side of the business and one of our biggest challenges remains accommodating demand with severely reduced capacity.
“If borders remain closed, travel curtailed and passenger fleets grounded, the ability of air cargo to keep the global economy moving will be challenged.”
North America-based carriers reported a 2.9% increase in cargo volumes during July as a result of strong demand on the transpacific, Asia-North America route, reflecting e-commerce demand for products manufactured in Asia. Capacity was down by 24.4% during the month.
Over in Europe, the region’s carriers registered a 22% year-on-year decline in July, while capacity was down by 36.5%.
IATA pointed out that this was an improvement on the 27.6% drop off recorded in June. However, it added: “Demand on most key trade lanes to/from the region remained weak.”
In the July document, IATA reported that COVID-19 remained highly prevalent in many regions of the world in June. But most strict lockdowns were lifted throughout the world around the end of May, allowing manufacturing activity to restart. The global manufacturing output Purchasing Managers’ Index (PMI) consequently rebounded to its highest level since January (Chart 3). This recovery was widespread across numerous key economies, with the PMI for China trending above the 50-line consistent with growing output for the fourth consecutive month