March 2019: Asia Pacific continues to lead the world in shrinking air cargo markets
March 2019 at a glance:
Total Chargeable Weight: -2.4% year-over-year (YoY); +25.2% month-over-month (MoM).
General cargo -4.8% YoY, special cargo +3.5% YoY.
Direct Ton Kilometers (DTK’s): -1.8% YoY.
Yield increased to USD 1.80 (-5% YoY, +0.5% MoM). The yield measured in EUR stood at 1.60.
The cargo load factor dropped by 1.8 percentage-points YoY, but rose by 2.6 MoM.
High-Tech & Other Vulnerable Goods (the largest category special cargo) increased by 12.9% YoY, whilst the one-but-smallest category (Valuables) fell by 9.1% YoY.
With air cargo volumes at their lowest in February 2019 (Chinese New Year!), the month of March was bound to show impressive month-over-month (MoM) figures, but even a large increase of 25% was not enough to save the first quarter of the year. Q1 2019 ended with a year-over-year (YoY) decrease in chargeable weight of 3.1%.
This worldwide average of -3.1% YoY hides considerable differences between the various regions of the world. WorldACD distinguishes between 6 different regions, which together make for 36 different geographical markets: 6 intra-regional and 30 inter-regional markets. 23 of these 36 markets decreased YoY.
Whilst Asia Pacific continues to be the world’s air cargo engine, it has become clear over the past half year that the engine runs much less smoothly than before. Markets within Asia Pacific lost 7.6% YoY in Q1. In the same period, 5 of the 10 markets to/from Asia Pacific also performed below the world average, notably the larger ones Asia Pacific to Europe (-4.9%), Europe to Asia Pacific (-4.3%) and North America to Asia Pacific (-4.7%).
On the positive side in Q1 (YoY) were the markets Europe to North America (+0.6%), Asia Pacific to Middle East & South Asia (MESA) (+2.9%), Africa to Europe (+2.1%) and intra-MESA (+2.6%), as well as a number of smaller markets. Among the latter, Latin America to Asia Pacific and Africa to North America stood out (both +18%).
The largest exporting countries with YoY growth in Q1 were India, UK, Australia, Vietnam, Kenya Ecuador, Turkey and Chile, with YoY growth ranging from 0.1% to 6.7%. With the exception of Vietnam and Kenya, growth in these origins was entirely thanks to growth in special cargo, most notably Fish & Seafood. Among the world’s Top-20 air cargo agents, only 4 managed to realize YoY growth in Q1: Expeditors, DSV, Agility and Expolanka. Among the other 16, decreases ranged from 0.2% to 16.4%.
Between Q4 2018 and Q1 2019, we saw a worldwide drop in kilograms of 10.3%. The origins North America and MESA suffered least (-3.7%), but Asia Pacific most (-16.8%): China and Hong Kong taken together decreased by more than 20%, double the worldwide drop. Zooming in on Trump’s Trade War, volumes from China to USA fell by 21% between Q4 and Q1, whilst USA to China fell by 12.5%.
All in all, we do not expect the April figures to cause a change in the trend seen so far this year.