The latest cargo data from IATA for Q3 2016 suggests that the global international air freight market has so far experienced an uptick in the year, while global trade volumes have lagged behind. By the end of the third quarter of 2016, global international freight tonne kilometres (FTKs) were 5.6% ahead of the 2015 year-end level.
However, Ti’s analysis of air freight trade lanes between emerging markets and developed markets suggests these trades have not fared nearly as well. Based on Eurostat and US Census Bureau data for January-August 2016, Ti forecasts that, cumulatively, air freight tonnage from the EU and US to a selection of 50 emerging markets is predicted to fall by 3.1% in 2016. In reverse, air freight from the same 50 emerging markets to the EU and US is expected to fall by 1.3% compared to 2015.
Of course there is a great deal of disparity between performances of individual trade lanes. Excluding trade lanes with volumes below 10,000 tonnes, of the lanes from the EU and US to the 50 emerging markets, only 22 reported growth. For emerging markets to the EU and US, 25 of 44 are expected to see increased tonnage. Taking a closer look at the 10 lanes which are forecast to grow most in 2016, they are well and truly a mixed bag. Four of the 10 (EU-Pakistan, Pakistan-EU, Brazil-US and Tanzania-EU) have fared poorly for emerging markets over the longer term, as indicated by their weak average annual growth rates between 2005 and 2016. The remainder have done well in both 2016 and over the last 10 years or so.
EU-Vietnam air freight is expected to be the fastest growing emerging market air trade lane in 2016, growing at 37.2% in 2016. Growth is being primarily driven by increased electronics volume, which for January-August 2016 is up to over 5,000 tonnes from under 2,000 tonnes in the same period in 2015.
Mexico-EU’s projection of 22.3% is largely as a result of fruits tonnage more than doubling from around 8,000 tonnes in January-August 2015 to nearly 18,000 tonnes in January-August 2016, though electronics (+6.9% to over 15,000 tonnes) and vegetables (+21.1% to almost 9,000 tonnes) have also recorded good increases. Bangladesh-EU tonnage growth is due almost exclusively to apparel tonnage increasing by 42.6% to nearly 56,000 tonnes for January-August 2016 year-on-year.
EU-Colombia is forecast tonnage growth of 18.7% in 2016, largely due to fertiliser volume increasing from around 3,000 tonnes to over 7,000 tonnes for January-August 2016 year-on-year. On the same basis, EU-Oman volume growth has been more broad based: iron & steel articles, fertilisers and chemical products have driven the improvement.
Lastly, Cambodia-EU has been a dynamic market in recent years, its growth has taken off since 2011, albeit with the odd bump in the road. Volumes have grown from around 3,000 tonnes in 2011 to an estimated 13,000 tonnes in 2016. Almost 90% of volume is apparel.
In summary, it is clear there are bright spots as is always the case with emerging markets, but it seems that for air freight, there really are relatively few this year.
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Source: Transport Intelligence, October 31, 2016
Author: David Buckby
