IATA reports supply chain disruptions halve November air cargo growth

The IATA has reported strong cargo demand continuing in July, as it released data for global air cargo markets.

The International Air Transport Association (IATA) has released data for global air cargo markets showing slower growth in November 2021. Supply chain disruptions and capacity constraints impacted demand, despite economic conditions remaining favourable for the sector.

Data reveals that retail sales in the US and China remain strong. In the US retail sales were 23.5% above November 2019 levels. In China, online sales for Singles’ Day were 60.8% above their 2019 levels. Global goods trade rose 4.6% in October (latest month of data), compared to pre-crisis levels, the best rate of growth since June. Global industrial production was up 2.9% over the same period.

The inventory-to-sales ratio remains low. This is a positive for air cargo as manufacturers turn to air cargo to rapidly meet demand and has meant a large boost in optimism for the start of 2022.

Additionally, the recent surge in COVID-19 cases in many advanced economies has created strong demand for PPE shipments, which are usually carried by air.

However, supply chain disruptions are slowing growth. Factors highlighted by the IATA include Labor shortages, partly due to employees being in quarantine, insufficient storage space at some airports and processing backlogs exacerbated by the year end rush created supply chain disruptions. Several key airports, including New York’s JFK, Los Angeles and Amsterdam Schiphol reported congestion.

The November global Supplier Delivery Time Purchasing Managers Index (PMI) was at 36.4. While values below 50 are normally favourable for air cargo, in current conditions it points to delivery times lengthening because of supply bottlenecks.

“Air cargo growth was halved in November compared to October because of supply chain disruptions. All economic indicators pointed towards continued strong demand, but the pressures of labour shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities. Manufacturers, for example, were unable to get vital goods to where they were needed, including PPE. Governments must act quickly to relieve pressure on global supply chains before it permanently dents the shape of the economic recovery from COVID-19,” said Willie Walsh, IATA’s Director General. 

To relieve supply chain disruptions in the air cargo industry, IATA is calling on governments to:

  • ensure that air crew operations are not hindered by COVID-19 restrictions designed for air travellers.
  • Implement the commitments governments made at the ICAO High Level Conference on COVID-19 to restore international connectivity, including for passenger travel. This will ramp-up vital cargo capacity with “belly” space.
  • Provide innovative policy incentives to address labor shortages where they exist.
  • Support the World Health Organization / International Labour Organization Action Group being formed to assure freedom of movement for international transport workers.

November Regional Performances

Regional performance data shows that Asia -Pacific airlines are seeing its international air cargo volumes increase 5.2% in November 2021 compared to the same month in 2019.

North American carriers posted an 11.4% increase in international cargo volumes in November 2021 compared to November 2019. This was significantly below October’s performance (20.3%). Supply chain congestion at several key US cargo hubs has affected growth. International capacity was down 0.1% compared to November 2019.

Middle Eastern carriers experienced a 3.4% increase in international cargo volumes in November 2021, a significant drop in performance compared to the previous month (9.7%). This was due to a deterioration in traffic on several key routes such as Middle East-Asia, and Middle East-North America. International capacity was down 9.7% compared to November 2019, a small decrease compared to the previous month (8.4%).

Source: IATA

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