IATA: Air freight slowdown continues
The International Air Transport Association (IATA) released data for global air freight markets showin...
The International Air Transport Association (IATA) released data for global air freight markets showing a slowdown in growth for air cargo demand in June. Air freight volumes measured in freight tonne kilometers (FTK) rose just 1.2% compared to a year ago. This is consistent with falling trade activity and weaker than expected global growth.
Regional performance varied widely. Asia-Pacific, North American and Latin American carriers reported year-on-year declines (-0.3%, -3.3%, and -1.6% respectively) while European carriers reported that markets were flat. This was offset by the strong performance of Middle Eastern (+15.3%) and African (+6.7%) carriers to keep growth in positive territory.
The general trend of a weaker 2015 compared to 2014 can be seen in the half-year data. Air freight markets expanded by 5.8% in 2014; however year-to-date growth for 2015 stands at 3.5%.
“The half-year report for air cargo is not encouraging. With growth of just 1.2% over June last year, markets are basically stagnating. Some carriers are doing better than others at picking up the business that is out there. But overall it has been a disappointing first half of 2015, especially considering the strong finish to 2014. The remainder of the year holds mixed signals. The general expectation is for an acceleration of economic growth, but business confidence and export orders look weak. Air cargo and the global economy will all benefit if governments can successfully focus on stabilizing growth and stimulating trade by removing barriers,” said Tony Tyler, IATA’s Director General and CEO.
Regional analysis in detail
Asia-Pacific carriers saw a fall in FTKs of 0.3% in June compared to June 2014, and capacity expanded 4.0%. The region has experienced a notable slowdown in imports and exports over recent months, and latest data shows emerging Asia trade activity down 8%. Growth for the year-to-date was 5.4%. In addition to generally weak trade growth, the region is the most exposed to the China market where government policies are more focused on stimulating domestic markets.
European carriers reported flat demand in June (0.0%), compared to a year ago and capacity rose 2.2%. Improvements in Eurozone business confidence have not led to increased air freight demand, and consumer confidence has been hit by the Greek crisis. Growth for the year-to-date was -0.6%.
North American airlines experienced a decline of 3.3% year-on-year and capacity grew 2.8%. The positive impact of a modal shift to air as a result of the West Coast ports strike has faded and economic performance, despite some improvement in the second quarter, is subdued. Growth for the first six months of the year was -0.4%.
Middle Eastern carriers saw the strongest growth with demand expanding by 15.3%, and capacity rose 19.2%. Airlines in the region have pursued a successful hub strategy connecting both long- and short-haul markets. Although some major economies in the region have seen slowdowns in non-oil sectors, economic growth remains generally robust, which is also helping to sustain demand for air freight. Growth for the year-to-date is running at 14%.
Latin American airlines reported a fall in demand of 1.6% year-on-year, and capacity expanded 3.7%. Regional trade activity has grown in the first half of 2015, despite continuing weakness in Brazil and Argentina. Unfortunately this has not translated into stronger demand for air freight. Growth for the year-to-date was -6.9%.
African carriers experienced growth in demand of 6.7%, and capacity rose by the same amount. The Nigerian and South African economies have underperformed for much of the year so far, however regional trade has held up. Demand growth for the first six months was 4.8%.
IATA (International Air Transport Association) represents some 260 airlines comprising 83% of global air traffic. For more information, please visit: http://www.iata.org/pressroom/pr/Pages/2015-08-05-01.aspx
Kuehne+Nagel cuts carbon footprint by 70% for Honda China
Around 16,000 tonnes of CO2 has been cut from the supply chain of Honda's China-based manufacturing division through a road-to-rail transformation in partnership with logistics leader Kuehne+Nagel.
The programme was developed through KN Sincero, the joint venture between Swiss headquartered Kuehne+Nagel and Chinese automotive logistics firm Sincero, established in 2018.
KN Sincero worked with Honda China to develop an integrated solution to convert much of its domestic long-haul trucking to train lines, using regional hubs to improve supply chain performance and further reduce carbon emissions. The programme delivered consolidations as well as value-added services, including sorting, scanning, repackaging, GPS track and trace, and recyclable container management.
"Kuehne+Nagel has always been a supply chain partner that we can rely on, to help us improve our supply chain performance whilst also achieving our environmental goals,” said Mr. Jiang Hui and Mr. Takuji Kitamura, Joint General Manager of Wuhan Dong Hon, the logistics affiliate of Dongfong Honda Automotive.
After six months of shifting to the road-to-rail model, new supply chain reliability and efficiencies are expected to eradicate 16,000 tonnes of carbon emissions annually. The carbon savings represent an enormous 70% reduction in total.
"Automotive is one of the most important sectors in contract logistics, particularly in China, the world’s largest automotive market,” added Gianfranco Sgro, member of the Management Board of Kuehne + Nagel International AG, responsible for Contract Logistics. “I am glad that Kuehne+Nagel and Honda share a common vision of service, innovation and sustainability.”
Kuehne+Nagel’s Net Zero Carbon programme
Kuehne+Nagel announced its Net Zero Carbon programme in 2019 with a dual purpose to reduce CO2 output in its own logistics operations, as well as partnering with organisations to minimise their own impact on the planet. Kuehne+Nagel reached carbon neutrality globally in 2020 throughout its own, direct emissions, and is now focused on developing its capabilities to serve partners.
Dr. Detlef Trefzger, Chief Executive Officer of Kuehne+Nagel International AG, said the programme is “a package of measures to fight CO2 emissions and provide sustainable and innovative supply chain solutions – hand in hand with our suppliers and customers”.
As part of the initiative, Kuehne+Nagel established its own nature projects in Myanmar and New Zealand, and invested in ‘nature-based’ carbon dioxide compensation projects to strip harmful emissions from the environment. It is committed to being CO2 neutral for shipments in its network of transport suppliers by 2030.