Digital Edition

January 6 2020

Issue link:

Contents of this Issue


Page 137 of 147

136 The Journal of Commerce | Januar y 6 2020 Air Cargo 2020 ANNUAL REVIEW & OUTLOOK -13% yoy -3% yoy $2.00 $2.20 $2.40 $2.60 $2.80 $3.00 $3.20 $3.40 $3.60 $3.80 $4.00 15-Oct-18 12-Nov-18 10-Dec-18 7-Jan-19 4-F eb- 19 4-Mar- 19 1-Apr-19 29-Apr-19 27-May- 19 24-Jun- 19 22-Jul-19 19-Aug-19 16-Sep-19 14-Oct-19 11-Nov-19 9-Dec-19 Hong Kong to Eur ope Shanghai to Europe Asia–Europe air cargo rates fall in December Source: TAC Index © 2019 IHS Markit Weekly average air cargo spot rates prices measured in USD per kilogram (2.2 pounds) GLOBAL AIR CARGO is well on the way toward ending 2019 with negative growth in demand, and its recovery through 2020 remains unclear and likely to be shaped as much by a China trade deal made during the US presidential election campaign as by improving economic growth. The International Air Transport Association (IATA) figures for Jan- uary through October show a year- over-year decline of 4 percent in freight transport kilometers (FTK), the way air cargo carriers measure demand. To turn this around will require a huge increase in demand through the traditional peak season, something no one is predicting. "There will be no peak season this year on any of the major trades," said Steven Polmans, head of cargo at Brussels Airport and chairman of The International Air Cargo Associa- tion (TIACA). "We are already at the end of November, and there are some good days, and sometimes even a week that is not too bad, but we will not have a peak period like we saw in the previous two or three years." Freight Investor Service (FIS) noted in a November market report that there was little on the horizon that could bolster an already weak year, particularly on the trans-Pacific. "The general consensus that Q4 2019 is a damp squib holds true for at least one major trade route — the impact of the trade war that has restrained trans-Pacific air freight and shipping is poignantly demon- strated by the premature decline of Asia–US prices. Any hope of trans-Pacific price recovery in 2019 has well and truly dissolved," was FIS's grim assessment. Detlef Trefzger, CEO of Kuehne + Nagel, had a similarly gloomy view of the months ahead. He said after the global forwarder's third quarter results it would be well into 2020 before any recovery was seen in air cargo. Mixed signals So how will the air cargo industry chart its way through a turbulent 2020 buffeted by a slowing global economy, deeply disruptive trade dis- putes, and a Brexit that is threatening the UK–Europe trading relationship? George Anjaparidze, CEO of Swiss economics and strategy consultancy Veritas Global, believes any of three scenarios could play out through 2020, and he outlined those at a recent annual TIACA summit. Scenario No. 1 is a strong upturn in trade, where positive momentum Trade turbulence Air cargo flies into 2020 buffeted by weak demand, geopolitical tensions By Greg Knowler

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - January 6 2020