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  February 26th, 2015 | Written by

Demand For Air Cargo Takes Off

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The overall global demand for air cargo increased 4.5 percent in 2014 compared with a pallid 1.4 percent the previous year with the greatest growth concentrated in the Middle East, and Asia-Pacific regions according to the International Air Transport Association (IATA).

“After several years of stagnation, the air cargo business is growing again,” said Tony Tyler, director general of the Montreal-based IATA.

Asia-Pacific contributed to 46 percent of the total growth while the Middle East accounted for 29 percent. All regions, with the exception of Latin America, reported a strengthening of demand in December which saw an uptick in air cargo activity of almost 5 percent. Asia-Pacific carriers grew six percent in December compared to the previous year and 5.4 percent for 2014 as a whole with volumes in the region “benefitting from increasing import demand in addition to continuing manufacturing strength. Japanese and Chinese markets were particularly important contributors,” Tyler said.

North American airlines reported demand grew 2.8 percent in December and 2.4 percent for 2014, driven by import and export demand and a modest cutback in capacity by the carriers operating in the region. European airlines saw a 2.3 percent growth in December and 2.0 percent for the year largely because of the region’s continuing economic uncertainties and the ongoing impact of sanctions on Russia.

Middle Eastern carriers enjoyed the strongest growth of any region, expanding 11.3 percent in December and 11.0 percent for 2014 by extending their networks and enhancing capacity to make the Middle East a critical hub for freight traffic. In fact, cargo carriers in the Middle East were responsible for more than 37 percent of the total increase in global freight capacity in 2014.

African carriers expanded operations by 12.2 percent in December and 6.7 percent for the year. Although major economies Nigeria and South Africa underperformed during parts of 2014, regional trade activity held-up supporting demand for air transport of goods.

Latin American airlines reported activity falling by 4.5 percent in December making it the only region to report a decline while air cargo activity there grew by only 0.1 percent last year. The tepid growth was pegged largely on the ongoing political and economic issues affecting the region’s powerhouse economies, Brazil and Argentina.

“It’s all about delivering value as a supply chain with a strong vision of the future,” Tyler said. “All with a focus on providing a stronger value proposition to meet evolving customer needs, cutting shipping times, ensuring high-quality handling of temperature-sensitive goods, or benchmarking quality to improve customer transparency.”

As optimistic as Tyler sounded, he did warn that, “recent concerns over the health of the global economy and a corresponding fall in business confidence have not yet impacted air cargo. But it’s a downside risk we need to watch carefully as we move through 2015.”