The latest global air cargo market data released by the International Air Transport Association (Iata) shows slow growth in November, as supply chain disruptions and capacity constraints impacted on demand, despite economic conditions remaining favourable for the sector.

The baseline comparison against which the data is compared is the data of November 2019 – as this was the last normal demand pattern.

Iata’s data shows that global demand, measured in cargo tonne-kilometres (CTKs), was up by 3.7% (4.2% for international operations) – significantly lower than the 8.2% growth recorded in October (9.2% for international operations).

Capacity was 7.6% lower (-7.9% for international operations), relatively unchanged from October, with capacity remaining constrained owing to bottlenecks at key hubs.

Iata director-general Willie Walsh says air cargo growth halved in November compared with October because of supply chain disruptions. “All economic indicators pointed towards continued strong demand, but the pressures of labour shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities.”

African airlines saw international cargo volumes increase by 0.8% in November, a significant deterioration from the previous month (9.8%).

International capacity was 5.2% lower than pre-Covid-19 crisis levels. 

Nonetheless, Iata reports that, although economic conditions continue to support air cargo growth, supply chain disruptions are slowing growth because of several factors, including labour shortages, partly owing to employees being in quarantine. Insufficient storage space at some airports and processing backlogs exacerbated by the year-end rush created supply chain disruptions.

Several key airports, including New York’s JFK, Los Angeles and Amsterdam Schiphol reported congestion.

As for retail sales, Iata says these were strong in the US and China, with those in the US being 23.5% above November 2019 levels. In China, online sales for Singles’ Day were 60.8% above their 2019 levels.

Global goods trade rose 4.6% in October (latest month of data), compared with pre-Covid-19 crisis levels – the best rate of growth since June; while global industrial production was up 2.9% over the same period.

The inventory-to-sales ratio remains low – a positive factor for air cargo as manufacturers turn to air cargo to rapidly meet demand.

Also, recent surges in Covid-19 cases in many advanced economies have created strong demand for shipments of personal protective equipment, which is usually carried by air.

The November global supplier delivery time purchasing managers index was at 36.4; and while Iata says values below 50 are normally favourable for air cargo, in current conditions this points to delivery times lengthening because of supply bottlenecks.

He adds that governments must act quickly to relieve pressure on global supply chains before it permanently dents the shape of the economic recovery from Covid-19.

REMEDY

To relieve supply chain disruptions in the air cargo industry, Iata urges governments to ensure air crew operations are not hindered by Covid-19 restrictions designed for air travellers and to provide innovative policy incentives to address labour shortages where they exist.

Also, the organisation requests governments to implement the commitments governments made at the International Civil Aviation Organisation’s high-level conference on Covid-19 to restore international connectivity, including for passenger travel. This will ramp up vital cargo capacity by using available cargo space, even on passenger flights.

Further, Iata calls on governments to support the World Health Organization and/or the International Labour Organisation Action Group being formed, to assure freedom of movement for international transport workers.