Air freight took off in November, according to IATA
Air freight enjoyed an upswing in demand during November 2012, according to new traffic results from IATA. Air travel overall was a considerable 4.6 percent higher when compared to November 2012, according, up on the overall October result of 2.6 percent in October.
Freight volumes rose by 1.6 percent over the same period following a decline of 2.6 percent in October year to year, improving the load factor by one percentage point to 77.3 percent when compared to the same period a year ago.
According to a statement on IATA’s website, a portion of the increase reflects the impact of the Thai floods in November 2011, however, the association claims that the month-on-month increase of 2.4 percent is still a positive sign.
Airlines from Asia-Pacific and Middle Eastern carriers showed the strongest growth, with Asia-Pacific grown responsible for almost half the rise in total volumes compared to October. European airlines fared less well, who experienced a flat rate of year-on-year traffic.
· Asia-Pacific airlines were responsible for almost half the rise in total volumes compared to October. The 2.4% rise in month-on-month volumes for the region was in contrast to a 1.5% decline compared to November 2011. Freight capacity fell 2.8% over the period.
· North American carriers increased freight traffic by 1.7%, and cut capacity by 0.6%, compared to November 2011.
· European airlines’ year-on-year freight traffic was flat, and capacity grew just 0.3%.
· Middle East carriers’ freight showed the strongest year-on-year growth of any region, up 16% on just a 6.1% rise in capacity. Load factor surged to 46.7%, up 4 percentage points.
· Latin American airlines’ freight grew 4.2% year-on-year, but capacity grew at more than twice the rate, up 8.5%.
· African carriers grew freight volumes by 4.4% compared to November 2011. Although they kept the capacity increase to 3.6%, the load factor of 26.2% was still the weakest of all regions by a wide margin.
Despite these positive signs, IATA’s Director General and CEO Tony Tyler warned that it is ‘premature’ to consider this a turning point for air cargo markets to gain lost ground. However, Tyler added “when coupled with positive economic developments in the US and an improvement in business confidence in recent months, the conditions are aligning to see a return to growth in 2013. In 2013 we expect that cargo volumes will grow 1.4%, and passenger traffic will increase by 4.5% worldwide.”
UPS Posts Record Second Quarter with Revenues of $23.4bn
Growth across each of its core segments resulted in record results for UPS in the second quarter, with group revenues climbing 14.5% year on year to $23.4bn.
The global logistics outfit achieved consolidated operating profit of $3.3bn, up 47.3% compared to the same period in 2020. It is the second consecutive quarter of record profit, and a significant rise on Q1’s $2.9bn.
UPS Q2 Revenues in Brief
- Consolidated revenues: $23.4bn (+14.5% yoy)
- Domestic: $14.4bn (+10.2%)
- International: $4.82bn (+30%)
- Supply Chain Solutions: $4.2bn (+14.3%)
The US company’s domestic segment performed steadily with 10.2% revenue growth to $14.4bn. But it was its international and supply chain solutions segments where UPS saw the biggest gains. Strong demand in Europe led an increase in international revenues of 30% to $4.82bn. UPS’ supply chain solutions division saw revenue growth of 14.3% to $4.2bn, driven, the company said, “by strong demand in nearly all businesses”.
UPS’ steady growth throughout the pandemic has been led by the overarching vision of its chief executive Carol Tomé to do “better not bigger”, focussing on efficiency and high margin deliveries through its network over pure scale and volume.
“I want to thank all UPSers for executing our strategy and delivering high service levels, which fuelled record financial results in the second quarter,” she said. “Through our better not bigger framework, we are moving our world forward by delivering what matters.”
UPS Completes Sales of UPS Freight
The second quarter also saw UPS complete the divestiture of UPS Freight in a deal worth $800m - with a surprise result for the division, now called TForce Freight, under new owner TFI International.
“The second quarter was historically significant for TFI International, with the closing of our UPS Freight acquisition and record performance across the board,” said Alain Bédard, chairman, President and Chief Executive Officer, TFI International. “Particularly gratifying is the performance of TForce Freight, which has exceeded our operating ratio targets far ahead of schedule, and we have only just begun our work.”
In it first two months of ownership TFI reported that adjusted operating ratio (OR) was 90.1% for TForce Freight, far outperforming its forecasted OR of 96-97%.
“I wish to thank our entire team for their hard work and remarkable efforts, and officially welcome aboard our new TForce Freight colleagues who have seamlessly come under the TFI umbrella and are already making stronger than expected contributions,” Bédard added.