LONDON: The demand for global freight rose by 1.7 per cent in March this year compared to the same period last year according the data of the International Air Transport Association. The demand is reckoned in freight kilometer tons. This was five per cent lower than February 2018 and the slowest pace of growth in the last two years.
The year-on-year increase in capacity, measured in available freight ton kilometers (AFTK) fell to 4.4 per cent compared to 6.3 per cent in February. This was the first time in 20 months that annual capacity rose faster than demand.
The sharp growth slowdown is principally due to the end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand. A softening of global trade is also evident.
"It’s normal that growth slows at the end of a restocking cycle. That clearly has happened. Looking ahead we remain optimistic that air cargo demand will grow by 4-5 per cent this year. But there are obviously some headwinds. Oil prices have risen strongly, and economic growth is patchy. The biggest damage could be political.
The implementation of protectionist measures would be an own-goal for all involved—especially the US and China," said Alexandre de Juniac, IATA’s Director General and CEO. All regions except Latin America reported year-on-year declines in growth in March, with Africa in negative territory.