Air Cargo Demand Taking Off Again
The global air cargo industry continues to fly high without much turbulence, seeing marked growth at the close of Q1.
For the fourth consecutive month, the International Air Transport Association (IATA) has recorded double-digit year-on-year (YoY) growth. In March, the air cargo industry logged 23.1 billion cargo tonne-kilometers (CTKs), marking a 10.3 percent increase from March 2023 and a 17.4 percent increase since February.
More from Sourcing Journal
With that, the trade association said, traffic for Q1 2024 has eclipsed the record-high traffic the industry saw in Q1 2021.
That, said Willie Walsh, IATA’s director general, is a positive sign for the at-large industry.
“This [demand increase] contributed to a strong first-quarter performance which slightly exceeded even the exceptionally strong 2021 first quarter performance during the COVID crisis,” Walsh said in a statement.
Seasonally adjusted, the CTKs still saw increases. Month-on-month (MoM), the industry recorded a marginal 0.2 percent increase, but YoY demand has increased by 11.4 percent, the IATA said in its report.
The continued increases in demand for air cargo likely come from a number of factors. According to the report, “ongoing conflicts in the Middle East and Ukraine” are contributors, as are disruptions in the Suez and Panama Canals.
Those issues, the report said, have specifically bolstered the international CTKs of Middle Eastern and African airlines, which have the two highest annual growth rates. Airlines registered to the Middle East saw 19.9 percent annual growth, while African-registered airlines saw a 14.1 percent uptick. That’s strikingly higher than North American carriers, which, as in previous months this year, have seen the lowest annual growth.
The instability of the Red Sea, still not operating as normal after an onslaught of Houthi rebels’ attacks on cargo ships and freight providers, could also be contributing to the uptick in air transport, though IATA did not mention that tumult in its report.
But beyond geopolitical conflicts hindering supply chains, consumers’ desires could also be causing air cargo to ramp up. According to the IATA’s report, the increases have been “helped by the rapidly increasing demand for e-commerce services.”
That assertion could reference consumers’ penchant for quick-turnaround delivery on items from standard retailers, but may also encompass shipments from rising star marketplace platforms like Shein, Temu, Alibaba.com and TikTok Shop.