The global air cargo demand continues to improve supported by wider economic recovery, which is positive for an industry that has been badly hit by the coronavirus pandemic. Data from around the world show the global demand for exports has been recovering as most countries emerge from lockdowns and business activity restarts.
Recovery in cargo capacity restarted following the disruption caused by the grounding of passenger aircraft in early 2021.
Global cargo volumes reached an all-time high in March amid an improving macroeconomic backdrop although their growth softened modestly compared with February this year.
Industry-wide cargo tonne-kilometres (CTKs) rose by 4.4% vs the pre-crisis levels and by 0.4% month-on-month.
However, global available cargo tonne-kilometres (ACTKs) are still about 12% below the pre-crisis levels.
Cargo capacity has been recovering from the temporary fall in early-2021 when some airlines grounded their passenger aircraft due to the rise in Covid-19 cases, according to IATA, the global body of airlines.
Industry-wide available cargo tonnekilometres (ACTKs) picked up by 5.6% m-o-m in March and are currently about 12% below the pre-crisis levels (March 2019).
A more detailed view shows that the international capacity of dedicated freighters rose by 20.6% compared with the same month in 2019 while belly-cargo capacity fell by 38.4% over the same period.
Airfreight is an essential mode of transport for many industry sectors, ranging from high-end manufacturing, engineering, pharmaceuticals, retailing and the automotive sectors.
For example, it can take up to a month to take goods from Europe to the Far East by ship; but it takes a day by air. There are also time-sensitive goods such as medicines and documents which cannot travel any other way.
Just 1% of global trade moves by air, but that 1% represents 35% of global trade by value, according to IATA, a fact that has air cargo results closely scrutinised by economists looking for forward financial indicators.
Certainly, air cargo is surviving the pandemic crisis in better shape than the passenger side of the business. For many airlines, 2020 saw air cargo become a vital source of revenues, despite weakened demand.
But with much of the passenger fleet grounded, meeting demand without belly capacity continues to be an enormous challenge.
The biggest problem for air cargo is the lack of capacity as much of the passenger fleet remains grounded. Air cargo demand peaks towards the end of the year. That will likely be exaggerated with shoppers relying on e-commerce – 80% of which is delivered by air.
The capacity crunch from the grounded aircraft will hit particularly hard as the world is now in search for capacity for continued vaccine deliveries around the world.
A high value industry, air cargo is critical for serving markets that demand speed and reliability for the transport of goods. The highest value commodities, including computing equipment, machinery and electrical equipment, account for the highest share of airborne trade tonnage versus their share of containership tonnage.
Over the next few years as the world GDP grows and the world population demands higher value goods, the value per ton of total traded goods across the world is forecast to rise.
Aviation brings people together, delivers 35% of global trade by value, foster commerce and makes the world a smaller and more accessible place.
As such, aviation is closely linked to most of the UN’s Sustainable Development Goals.
And it is a vector of globalisation, which has lifted a billion people from poverty since 1990.
As trade facilitates prosperity, the aviation industry, air cargo in particular, is critically important to global economy.

 

 * Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn