February down – Chinese New Year confirms trend

 Air cargo’s difficult start to 2016, as discussed in our previous monthly trend message, was extended into February: worldwide volumes dropped by 3.8% year-over-year (YoY), the largest YoY volume drop in three years. The origins Asia Pacific and North America were the main culprits: for January/February together, their YoY volume decrease now stands at more than 7%. Africa, Europe and Middle East & South Asia each show around 5% growth for the same period. Of course, the weak YoY figures for Asia Pacific and North America ought to be viewed against the backdrop of last year’s windfall due to the port strike in the United States. Also, the negative impact of Chinese New Year on the February totals was bigger this year as it took place much earlier in the month than last year.

Contrary to what other sources have reported, the more positive news is that worldwide yields, measured in USD, remained basically stable between January and February. Even so, we noted considerable differences between the various origin regions: Africa and Europe were also leading in this category, with a 7.6% jump in African yields (in USD) and one of 2.2% in European yields (in EUR).

Some smaller countries deserve to be mentioned for their outstanding start to the year: in the first two months of 2016, revenues in USD increased YoY by 38% from Morocco, 23% from Chile, 13% from Sri Lanka and 10% from Bangladesh.

In the products domain, the transport of perishables reinforced its reputation of performing much better than general cargo (not only in volumes: already in 2015, yields for perishables dropped by a much lower percentage than general cargo yields). Does this trend weigh in on the much discussed modal shift from air to sea? Although certain perishables look immune to that shift so far, whether or not a modal shift may take place differs from country to country and from one commodity to another.

Negative YoY patterns around Chinese New Year (CNY) provided further confirmation of the air cargo slide in Asia Pacific. The usual strong dip after CNY was deeper this year than last year, and also lasted longer in terms of “low-business days”. From China and Hong Kong, the 2015 post-CNY-dip showed only one day with less than 10% of the pre-CNY volumes; this year there were four such days.

To end on a more joyful note: Royal FloraHolland, the Dutch flower auction house, states on its website that flowers and plants contribute to better health and to a more general sense of happiness and well-being. We would have thought that this would translate in massive flower transports for Valentine’s Day. Not so. Our research showed this: whilst most flowers are usually transported intercontinentally about four days before the weekend, i.e. on Tuesdays, the Tuesday before Valentine’s day was only the third-best Tuesday for flower transport in February. Apparently, we want to spread that general sense of happiness and well-being: just as well in these tough times.