Air cargo is generally not a good business. At least for airlines who take most of the long-term capacity risk. In the last five year the business went from dull to awesome. Many companies made more profit in the last five years than in their entire history. The first half of this year was pretty good and companies continue to naively believe that everything will be ok. We take the view the ice age may be just around the corner. Or at least go back to being dull. This article looks at the different Eras in the life of air cargo and outlines some scenarios that could unfold over the next years.
Posts tagged as “Outlook”
The Australian international air cargo market generated about 1.15m tonnes in the last 12 months, with inbound accounting for almost 60% of this. If recent growth in inbound cross border e-commerce traffic continues then the market could grow by almost 5% per year for the next five years. Exports could grow by as much as 4% if volumes recover to the 2018 peak levels. Without this we would expect lower growth rates for both imports and exports of around 1% per year. This article discusses long-term Australian air cargo market trends our latest forecast for inbound and outbound air cargo between 2025 and 2030.
Global trade is (again) in a phase of major disruption. Yet the commentary around the most recent quarterly company announcements shows that while engaging in tactics, businesses are failing to develop long term strategies. Yet much of what is happening should not come as a surprise and is consistent with longer term trends that have emerged over the last 10 years or so. Focusing on the air logistics business, this article examines the strategic choices that companies need to make to remain competitive.
International air cargo is highly reliant on global supply chains and cross border e-commerce traffic. Both look like they will take a beating in 2025. In January we were still expecting growth of between 3.5% and 7.4% but our latest forecast foresees a range of between -0.1% and +0.7%. This is driven a weaker economic outlook globally as well the potential loss of about one third of transpacific air cargo volumes due to US de-minimis rule changes.
The latest round of tariff announcements only that a quarter of US imports will be subject to at least an additional 10%. Additional tariffs imposed on 47 countries primarily in the Asia Pacific and across Africa range between 11% and 50%. Three Pacific Island countries – Fiji, Nauru and Vanuatu will be subject to additional tariffs starting 9 April. This article provides a summary of measures and exceptions, as well as discussing implications for Pacific Island exports.
The recovery of the Indian air cargo market appears to be complete. Both international and domestic volumes higher than their respective 2018 and 2019 peak levels. Indian air cargo outperformed overall world air cargo growth in in 2024. Over the next five years we expect cargo traffic could grow from about 3.7 million tonnes today to between 5 and 5.8 million tonnes, or about 6-9% per year. We expect international air cargo to grow faster than domestic air cargo. Currently international air cargo accounts for about two thirds of air cargo handled at Indian airports. This article discusses recent trends in Indian air cargo and a forecast through to 2029 as well as discussing implications for freighter aircraft demand.
For transportation providers understanding short-, medium- and long-term regulatory impacts on country-to-country flows is fundamental to network and fleet decisions across all transportation modes. For example, as China has grown its share of world non-bulk trade from around 11% in 2010 to about a quarter in 2023. To support this growth container shipping lines have invested in significantly larger ships. More and more freighters are being deployed to fly freight out of China. A shift to more intra-regional trade would require different capacity – smaller vessels, less planes, more trucks and provide increased opportunities for growth of rail services. Less trade overall would mean lower demand for capacity overall. Looming steep tariff increases are a legitimate cause for fear, but changes in the world trading system have been unfolding over many years. This article provides some thoughts on how to think about the impact of tariffs in the context of how supply chains have been evolving over the past 20 years.
Lack of demand continues to be holding back EU industrial growth. Recent business survey data through to October show a further drop in economic sentiment, capacity utilisation and orderbook. The main factor cited by European companies limiting production output is demand and not factors such as material or labour shortages that were an issue two years ago. Trade statistics reflect this continued weakness of European industry – particularly in Germany. However, the overall gloomy picture hides strong performance in some individual markets. This article provides commentary on the latest industrial survey figures in the context of import and export developments to key markets.
Year to date ocean and air trade from the EU is up slightly compared to last year. However, latest European Union industrial indicators provide little evidence of an imminent recovery of industrial activity. As such it is unlikely that we will see any substantial further pick up in air and ocean import and export activity. This article takes a look at latest industrial indicators for the European Union including manufacturing capacity utilisation, orderbook, inventories, production trend and expectations and factors limited further output. The analysis includes an interactive dashboard with country level data.
The e-commerce fuelled boom in US domestic air traffic appears to be over. This could have profound implications for the domestic air express business and the need for aircraft capacity in a market that is home to 43% of the world’s freighter fleet. Historically, there has been a strong correlation between growth in online shopping, overall economic growth and traffic moving through US domestic air express, e-commerce and general cargo networks. However, since late 2022 this relationship seems to have broken down – the market declined by 11% when the underlying fundamentals should have led to moderate growth in 2023 and acceleration in 2024.This article digs deeper into the data and provides an explanation as to what is happening.