Geneva: Air freight, a leading indicator of the health of world trade, is picking up slowly but is still down on last year and the upturn remains fragile, an industry body said on Thursday.
Cargo executives expect a rise in freight volumes and yields over the year, but costs including fuel are rising, the International Air Transport Association (Iata) said.
“Since the low point was hit last December, air freight volumes have risen by 10%,” said Iata’s latest quarterly Cargo Market Analysis.
But part of the upswing came at the expense of yields, which fell by nearly 20% in the first half of 2009, as revenues on international air freight markets plunged by some 40% over levels a year ago.
Stronger growth underway in many Asian economies has boosted domestic air freight markets in the region, it said.
Air freight data on both domestic and international markets now point to a consistent picture of stabilization in the first quarter, followed by an upturn in the second quarter which has continued into the first part of the third quarter, it said.
“However, the upturn remains fragile until the economic recovery broadens out from an inventory cycle to stronger consumption and business investment,” Iata said.
The swings of the inventory cycle are highly correlated to changes in air freight, according to the Geneva-based body which represents 230 carriers.
The recent rise in air freight volumes has been associated with a drop in ratios of inventory to sales in the US and elsewhere, it said.
“The key issue is whether de-stocking really has come to an end since, in the absence of a near-term revival in consumer and business spending, the inventory overhang still looks large. This could for a time limit the strength of the upturn in air freight,” it said.
Shipments of semi-conductors are a good indicator, as computers and electronic goods represent a high proportion of air freighted goods, according to Iata. Semi-conductors fell further than air freight and didn’t bottom out until the end of the first quarter, it said.
“However, during Q2 there has been a significant upturn, albeit to levels still over 20% below those seen at the same time last year,” it said.