March 2017: Volumes Up, DTK's Up, Yield Up,
Confidence Up

 April 30, 2017

Did Donald Trump's first 100 days in the White House bring any successes for American business? Certainly not for air cargo, unless his 'America First' sloganeering would mean that the USA looks to reduce its share ... The Q1 performance of USA-carriers as a group has been way behind all other regional carrier groups. Interestingly, for all carriers together, revenues (in USD) from air cargo destined for the USA grew stronger than for any other destination region (+14.7% against +8.5% worldwide), but revenues from the USA showed the opposite trend: +2.3% vs +8.5% worldwide. By the way, revenues from domestic USA dropped by 2.9%.

March 2017 will be remembered in air cargo for a year-on-year (YoY) percentage growth not seen since the recovery years 2009/2010.
The worldwide YoY numbers are impressive, by any standard:
 - 14.6% increase in chargeable weight (origins Asia Pacific and Europe +19%)
 - 16.4% increase in DTK's (Direct Ton Kilometers, the measure combining weight with the geographical distance between origin and destination of shipments);
 - 1.7% increase in yield when measured in USD (5.6% in EUR)
 - The WorldACD Worldwide Weight index (Moving Average Last 12 Months, 2008 = 100) jumped by more than one full point to 122.8.

Business was particularly upbeat from Hong Kong, Shanghai, Beijing, Guangzhou, London, Milano, Frankfurt and Chicago: all had a growth of more than 20%. Contributing elements seemed to be sea-to-air shifts and the launch of new consumer products. A few other factors also helped to realize this unusual YoY growth. Especially in Europe, volumes tend to be lower around Easter (last year in March, this year in April). Also, March 2017 had one more Friday (usually one of the top cargo days) than March 2016. Without these two factors, the March 2017 YoY growth would have been around 11%. We expect that April will be another very good month, but - in view also of the Easter-effect - YoY growth may stop around 10%.

Airlines must have been pleased with a worldwide USD-yield improvement of 5.1% month-on-month. The origin area Asia Pacific showed the highest growth (+11.9%), but this area was also the only one with a yield drop for all incoming traffic (-0.7%). The yield index for eight of the ten largest region-to-region markets went up as well (details on our website).
Product Categories & Regional Carrier Groups

How did the different regional carrier groups fare in Q1 in specific cargo product categories? Carriers from Asia Pacific and the Middle East recorded the largest overall YoY growth with 12% resp. 9%. Their colleagues from the Americas grew more than their Asian and European competitors in non-general cargo. The Americans showed strong YoY growth in dangerous goods (DGR), pharmaceuticals (PIL) and vulnerable cargo, albeit from a small base. The five African carriers in our database, although not necessarily representative for Africa as a whole, almost doubled their carriage of DGR and grew 40% in PIL, but again: from a low base. In perishables, African carriers attained the highest growth percentage of all. The Europeans remain far ahead in total tons carried in PIL and DGR: their % growth may have been lower, but they still added an impressive 10% resp. 11% to their volumes.