October 2019: how are the large regions holding up?

November 28, 2019

October 2019 at a glance:
Total Chargeable Weight: -5.0% year-over-year (YoY); +7% month-over-month (MoM).
General cargo -8.2% YoY, Special cargo +2.7% YoY.
Direct Ton Kilometers (DTK’s): -5.3%
Yield stood at USD 1.76 (-11.2% YoY, +2.5% MoM).  The yield in EUR stood at 1.60.
The cargo load factor dropped by 3.6 percentage-points YoY, but increased by 2.2 MoM.
High-Tech & Other Vulnerable Goods increased by +13% YoY, whilst Pharma & Temperature Controlled Goods rose by +8% YoY. Perishables in total declined with -1% YoY: fish & seafood did best (+6% YoY) and flowers did worst (-3%).

(See www.worldacd.com/yields for more yield developments)

It may not come as a surprise, but the saga told in the past months, continues in October: worldwide air cargo volumes dropped 5.0% compared with the same month in 2018. Yield (in USD) decreased with 11%, and revenues from air cargo (in USD) were 16% lower. Of all origin regions, Latin America was hit hardest with a YoY volume decrease of 10%. The only origin region that remained stable was Africa. As destinations all regions contracted – ranging from Latin America (-8%) to the Middle East & South Asia (-1%). The build-up towards the end-of-year peak is not very different from last year: October was 7% higher than September, which is the same MoM growth as in 2018.

Of the Top-20 origin cities in the world, only two showed a YoY volume increase in October, and both are in China: Guangzhou (+16%) and Shanghai (+3%). Some ‘smaller’ origins in Asia Pacific also recorded positive results: Shenzhen +58%, Zhengzhou +19%, Ho Chi Minh City +7%; and we noted double digit growth from Perth (+22%).

This month we take a closer look at the performance of the three large regions Asia Pacific, North America and Europe. For the Year-to-Date, all three are in line with the worldwide average of -5% in volumes. But there are clear directional differences in two of the three markets between these regions.

Most balanced is the Asia Pacific - Europe market, with 2% more cargo going eastward than westward. The Transpacific and Transatlantic, however, are much less balanced. There is much more cargo to North America than from North America: 68% on the Transpacific and 40% on the Transatlantic. Not surprisingly, in both markets the yields to North America are also much higher than in the other direction (78% resp. 65%, in USD). However, when compared with 2018, the yields to North America dropped more than yields in the opposite direction. In other words, in both markets the directional difference in yields became smaller.

When we compare 2019 with 2018 for these three regions, the total volume on the six markets (i.e. both directions) dropped by 5.3% for the Year-to-Date, but special products did better, especially pharma (+7%), high tech (+7%) and fish & seafood (+11%). For each of the 6 markets the general cargo yield dropped more than the special cargo yield. This seems to be the new norm, as we reported in our previous Trends message. Especially for perishables, the yields held up well.

For details on long term yield trends between regions worldwide, the Yield Index Regions on our website provides a view covering more than 10 years.