22013 ending well - Pharma topping the charts

Last month, we wondered whether the October figures were a harbinger of better times: it seems they were indeed. November was plainly an old-fashioned good air cargo month. Chargeable weight increased by almost 8% year-over-year, whilst the yield drop compared to November last year was limited to 2.5%. Thus revenue in November was 5.2% better than last year, one of the best results of 2013. Worldwide yield increased considerably compared to October 2013 (+3%).

As we wrote last month, the bellwether cities of Shanghai and Hong Kong peaked in October 2013. It now turns out they did even better in November, together showing a 9% USD-revenue increase over November 2012 with stable year-over-year yields. And the increase over October 2013 was a whopping 23% (last year 21%). Hong Kong had its best month ever!

Looking at the nearly complete 2013-results, we can only conclude that the year as a whole was too weak to be of much comfort to the industry. Air cargo hardly grew in volume (+1.6% through November), whilst year-over-year USD-yields dropped by 3.7%.

If there is light at the end of the tunnel, it may well be because of what happened in specialist air cargo, for which we recorded a growth of 7% over 2012. Half of it came from increased transport of Perishables by air. Valuables (+14%) and pharmaceuticals (+9%) achieved the highest percentage growth. Pharmaceuticals now generate 5x more volume than Valuables, whilst they also lost less in yield than any other air cargo category. 'Pharma' has the largest differential between actual and chargeable weight: 18% vs 9% for other cargo, and its USD-yield was on average 49% higher than the general cargo yield in the relevant markets. It was air cargo’s undisputed favorite in 2013.

There can be no doubt that Europe is still by far the most important pharmaceuticals outbound market, generating 60% of the worldwide totals and registering a 9% growth over 2012. Europe strengthened its position in the segment, as its shipments also showed a characteristic we seldom see these days, viz. a stable yield year-over-year! The second biggest region in this segment is now South Asia. However, whilst that area’s volume increased with a healthy 12%, its yield (-5.5%) trailed the worldwide trend. Asia Pacific as an origin showed most growth, albeit from a very small basis still. Of the 10 largest intraregional markets, MESA-Africa grew 7% revenue-wise.

Consumers in the Asia Pacific region absorbed 22% of all pharmaceuticals shipped by air worldwide, directly followed by North America, which swallowed 21%. Asia Pacific buys its ‘Pharma-by-air’ almost exclusively from Europe, whilst North America buys 2/3 from Europe and 1/3 from MESA.

WorldACD will follow developments, to see how the segment’s landscape changes.
With all these pharmaceuticals flying around, we at WorldACD wish you a healthy and happy 2014.