Capacity outstrips demand for the fourth time in five months as slow growth expected to continue.

Freight growth

Air cargo continued to grow in July despite lingering concerns over the prospect of trade wars between the US and China.

Data from the International Air Transport Association shows that demand, measured in freight tonne kilometers (FTKs), rose 2.1% in July 2018, compared to the same period the year before.

Despite the moderate rise, this proved the slowest pace of growth since May 2016. In addition, freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 3.8% year-on-year in July. This was the fourth time in five months that capacity growth outstripped demand growth.

The tariff war and increasingly volatile trade talks between the world’s two largest trading nations—China and the US—are rippling across the global economy putting a drag on both business and investor sentiment

“July demand for air cargo grew at its slowest pace since 2016. We still expect 4% growth over the course of the year, however the downside risk has increased," said Alexandre de Juniac, IATA's Director General and CEO.

"The tariff war and increasingly volatile trade talks between the world’s two largest trading nations—China and the US—are rippling across the global economy putting a drag on both business and investor sentiment. Trade wars only produce losers."

Although the temporary grounding of the Nippon Cargo Airlines fleet may have amplified the growth slowdown in early July, indicators such as the ending of the inventory restocking cycle, a weakening in export order books in Europe, China and Japan, and longer supplier delivery times in Europe and Asia mean that slower growth is likely to continue in the meantime.

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