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Oct 15,2021

IATA Air Cargo Market Analysis-August 2021

Key points:

The Air freight services transportation situation remained stable in August. Compared with August 2019, the industry-wide cargo ton-kilometers (CTKs) increased by 7.7%, and in July it increased by 8.8%. After excluding seasonal factors, the trend of CTKs continues to improve, which is much higher than the level before the epidemic.


The development of key demand drivers such as manufacturing production and export orders still provides support for air cargo demand, but the supply chain disruption caused by the epidemic is also affecting cargo capacity and putting upward pressure on freight rates.


The industry-wide cargo load factor (CLF) reached 54.2% in August, a record high. CLF in all regions maintains a relatively high level, with the highest level in the Asia-Pacific region. 


Air freight services


Air cargo volume growth remains strong in August

In the past four months, air cargo demand has been much higher than before the epidemic. Compared with August 2019, the industry-wide cargo ton-kilometers (CTKs) increased by 7.7% in August 2021, only slightly lower than July (8.8%) and well above the long-term monthly average of 4.7%. After excluding seasonal factors, global freight volumes continue to show a horizontal trend (red line in Figure 1). African airlines reported the fastest expansion of CTK for a month, 32.4% higher than before the crisis in August 2019, followed by North American airlines (19.3%). In contrast, CTKs in Latin America continued to decline (-13.2%).

The outlook is still optimistic, but there are still challenges

At present, the prospects for air cargo business are still optimistic, but the growth of some key demand drivers has slowed recently, and epidemic-related constraints have increased the pressure on available cargo capacity.

For the recent demand for goods, an important indicator is the company's low inventory level, as shown in the ratio of inventory to sales in Table 2. Historically, this situation is related to the rising air cargo volume, because companies and shippers tend to choose air cargo over other modes of transportation to meet customer needs as soon as possible.


Air freight services

Transport disruption in the Asia-Pacific region has led to a decline in global cargo capacity

In August, the pressure on global Air freight services freight capacity increased. Compared with the pre-crisis in August 2019, the industry-wide available cargo ton-kilometers (ACTKs) in August 2021 decreased by 12.2%, which was a decrease of 1.7 percentage points from July. On a monthly basis, ACTK fell 1.6%, the fastest decline since January 2021. The poor performance of global production capacity is largely due to the development of the Asia-Pacific domestic market. Due to the spread of the mutant virus in mainland China, Nanjing Airport was closed, and Shanghai, Beijing and other major airport hubs strictly quarantined the airport and crew. The lockdown of the epidemic has also put pressure on the available cargo spaces in Vietnam. In other regions, production capacity in the highly volatile Latin American market also fell by 4.6%. Except for the Latin American market, in other regions of the world, ACTK continues to recover at a slow pace

The load factor is still much higher than the pre-crisis level

While the supply of goods has declined, the demand for goods has risen, which means that the industry's cargo load factor (CLF) hit a new high in August, reaching 54.2% (Figure 5). The cargo load factor in all regions remained high, with the highest in the Asia-Pacific region.

International air cargo volume remains stable

As far as the entire Air freight services industry is concerned, the international air freight industry continues to maintain a positive trend, which is still much higher than the level before the crisis. Compared with August 2019, CTK in August 2021 increased by 8.6%-basically the same as in July (Figure 6). Growth results in all regions are similar to July.