September 2019 copies average of preceding six months…

October 31, 2019

September 2019 at a glance:
Total Chargeable Weight: -5.4% year-over-year (YoY); +1% month-over-month (MoM).
General cargo -8.7% YoY, Special cargo +2.7% YoY.
Direct Ton Kilometers (DTK’s): -6.1% (viewed in combination with the 5.4% volume decrease, this signifies a shift - on average - from longer haul to shorter haul markets).
Yield stood at USD 1.72 (-11.5% YoY, +0.4% MoM).  The yield in EUR stood at 1.56.
The cargo load factor dropped by 3.6 percentage-points YoY, but increased by 2.3 MoM.
High-Tech & Other Vulnerable Goods increased by 9.1% YoY, whilst Pharma & Temperature Controlled Goods rose by 10.2% YoY. Perishables in total grew 1.4% YoY: fish & seafood did best (+10.2% YoY) and flowers did worst (-1.1%).

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

Our story is in danger of becoming monotonous, dull, or whatever synonym you care to choose: September was no different from most earlier months of the year. We saw worldwide volume shrink by 5.4% YoY, yield (in USD) by 11.5%, and revenues  from air cargo (in USD) by 16.3%. All origin regions suffered, Asia Pacific most (volumes down by 5.8% YoY, and revenues in USD by 18.9%) and Africa least (volumes down by 3.2% YoY, and revenues in USD by 6.2%). The destination Middle East & South Asia did better than all other destination areas (volume YoY -1% only). During the first three quarters of the year, all areas showed negative YoY trends, both in outgoing and in incoming volumes; Africa outbound was the only exception, registering a mere 1.1% increase…
 
The first three quarters of 2019 showed very different pictures for the 40 largest origin countries, which – together - produce 87% of the total air cargo volume in the world. Only 10 countries showed a volume increase YoY. As a group, these top-10 realized a growth of 8.3%. For the other thirty countries combined, growth was negative (-7.4%).

What caused the top-10 to outgrow the others by such a large margin?

The answer can be found in the data on special cargo. Compared with the first nine months of 2018, the top-10 countries increased their combined special cargo volume by 10.3%. The other thirty countries barely managed to grow in this category: +0.6%. But even more telling is the fact that in the top-10 countries combined, more than half of the total consists of special cargo (51.4% for Q1-3 2018 vs 52.3% for Q1-3 2019). For the other thirty countries, the share of special cargo is only a quarter.

For years already, special cargo has outgrown general cargo, a trend propelled by an increased worldwide demand for special products (in particular perishables). Thus, it does not come as a surprise that Norway, Kenya, Colombia and Chile, countries in which outgoing special cargo accounts for more than 80% of the total, are all part of the Top-10 group. Norway is in fact the top-country with a growth of almost 20%, whilst Pakistan and Vietnam also score growth above 10%. The group is completed by Egypt, Indonesia, South Africa and China. The latter country had no overall growth, but it recorded a 12.8% YoY growth in special cargo (mainly High-Tech).

Lastly, the important role of special cargo reveals itself not only in volumes, but also in yields/rates. In Q1-3 2019, we saw the USD-yield drop by 8% YoY for general cargo, but by 4% for special cargo. And the gap was larger still in the abovementioned top-10 countries, which saw their combined special cargo yields drop by 2% only.