TAIPEI — Steady growth in air freight demand was recorded by Asia’s airlines during September as the industry continued to benefit from rising international trade.
Preliminary traffic figures for the month of September released today by the Association of Asia Pacific Airlines (AAPA) showed further growth in exports from key Asian manufacturing centres, helping to underpin a 5.3 percent increase in international air freight demand, measured in freight tonne kilometres (FTK).
Combined with a 4 percent growth in offered freight capacity, the average international freight load factor edged 0.8 percentage points higher to 64.1 percent for the month.
AAPA director general Andrew Herdman said air freight demand continued the positive momentum seen since the market bottomed out in the fourth quarter of 2013.
However, he offered his customary note of caution. “While we are seeing sustained growth in both passenger travel and air cargo demand, market conditions remain quite challenging.
“Asian airlines are carefully reviewing their operations to better match supply and demand on a route by route basis, with the aim of ensuring that further traffic growth helps to restore profitability,” Herdman said.
According to the International Air Transport Association's (IATA) Airline Industry Forecast 2014-2018 that was released last week, international air freight volumes are forecast to increase at a compound annual growth rate of 4.1 percent over the next five years.
"This year, more than $6.8 trillion worth of goods, equivalent to 35 percent of total world trade by value, will be transported around the world by air," said IATA director general Tony Tyler.
The fastest growing international routes will be between the Middle East and Asia, at 6.2 per cent. Within Middle East (4.6 per cent), North America to South America (3.9 per cent), and Europe to Southern Africa (3.8 per cent).
Significant volume imbalances will continue. The imbalance in flows from Asia to North America is estimated to be 1.1 million tonnes in 2018, and from Asia to the Middle East the imbalance will be 0.6 million tonnes, IATA said in a statement.
By 2018, the 10th largest international air freight markets will be the US (10,054,000 tonnes), China (5,639,000), the UAE (4,974,000), Germany (4,763,000), Hong Kong (4,648,000), Korea (3,487,000), Japan (3,480,000), the United Kingdom (2,808,000), Chinese Taipei (2,350,000) and India (2,223,000).
To improve the competitiveness of air cargo, the industry is aiming to cut average transit times by up to 48 hours by 2020. To achieve this, air freight is modernising its processes, improving quality and reliability, and widening the range of services offered.
But it is more than a desire to provide better customer service. Glyn Hughes, global head of cargo for IATA, told a conference in Korea this month that enhancing the service proposition was a matter of survival for the air cargo industry.
“The shippers are saying they want greater transparency, flexibility and reliability. If as an industry we don’t respond to that, what’s our relevance going forward?” he told reporters at TIACA’s Air Cargo Forum.
“It is a matter of survival for the industry. If you lose touch and no longer provide the solutions that your customers are looking for, then it will accelerate modal shift where other transport operators will say if air cargo cannot provide what the shipper community is looking for, we will.”
Earlier this year, Hughes’ predecessor at IATA Des Vertannes set an industry goal of cutting 48 hours off the average end-to-end time of a consignment. Vertannes noted that since the 1960s, the transit time of air cargo remained at six to seven days, and this needed to change.
By cutting down the end-to-end the time, the industry would be making dramatic improvements to processes and data sharing across the supply chain that would enable the airlines to cope with handling products that were growing in value and complexity.
Contact Greg Knowler at email@example.com and follow him on Twitter: @greg_knowler.