Industry Pulse: Air freight may have peaked
Industry-wide freight ton kilometers (FTKs) grew by 9.2% in September, down 2.4% from August, the International Air Freight Association (IATA) reported. That's 4.8% stronger than the average five-year pace and 6% stronger than the average 10-year pace, but also the slowest growth since April.
The data marks a five-month low for air freight, which IATA considers evidence that air freight has reached its cyclical peak.
Demand is still growing faster than capacity, which means AFTKs grew significantly less than FTKs in September, at a rate of 3.9% YoY.
FTKs and AFTKs dropped in September, signaling the air freight cargo peak. Credit: Supply Chain Dive
Despite a strong August report, air freight cargo may soon be on the downturn as the industry struggles to find its balance. Exports are on the rise, but demand and capacity still aren't synchronized. September's data doesn't spell doom for the industry, but it does suggest the industry may have peaked or is about to peak — and that jibes with August's forecast.
The peak is cyclical, but one reason for it could be attributed to a weakening U.S. dollar, which the report said is helping balance U.S. exports and imports. A downturn should be expected, but not a strong one: air freight is now in peak season, so the next few months should produce solid growth for the industry.
Not only that, but e-commerce is still barreling ahead as more and more consumers buy goods online. That's good for all modes of transportation — including air freight. Although FTK growth is likely to decelerate, it shouldn't for long.