IATA records weakening air freight markets in March
Air freight markets weakened in March, according to IATA, as the improvement in air cargo growth rates that began at the end of 2012 stalled.
Global Freight Tonne Kilometers (FTKs) were down 2.3 percent in March compared to March 2012, with only the Middle East and Africa showing an expansion. Asia-Pacific carriers, which comprise 38.5 percent of the market, experienced a 3.3 percent fall compared to the previous year - this region showed the greatest weakness in terms of actual freight volumes. The US and Europe, however had larger percentage falls (5.2 percent and 4.0 percent respectively), but on a smaller market share.
Global air freight volumes are now only 1.5 percent above the October 2012 low point, down from the 3.5 percent rise that had been reached in January.
“The March decline in air cargo is most likely a temporary stall. The fundamentals for a sustained improvement in air cargo volumes are in place. Business confidence continues to signal forthcoming expansion, and the solid increase in new export orders seen in 2013 should boost air freight in the coming months. Much of the current weakness is coming from Asia-Pacific airlines. While the region is economically strong, the economies of its trading partners are not. The Eurozone is showing renewed weakness and the negative impact of US budget cuts is yet to be fully measured,” said Tony Tyler, IATA’s Director General and CEO.
Explanation of measurement terms:
FTK: Freight Tonne Kilometers measures actual freight traffic
AFTK: Available Freight Tonne Kilometers measures available total freight capacity
FLF: Freight Load Factor is % of AFTKs used
After adjusting for seasonal factors, it is clear that the improving trend witnessed in the fourth quarter of 2012 has been reversed. The global load factor slipped marginally to 46.7 percent, and capacity fell by 0.3 percent.
Asia-Pacific carriers saw cargo traffic fall 3.3 percent compared to March 2012. Airlines in the region have experienced most of the weakness in the global trend, with a 3 percent drop in volumes in March compared to January this year. Although regional indicators are still solid, major trade partners in Europe continue to be hampered by economic weakness and sovereign debt problems. Capacity also fell, down 2.8 percent, compared to a year ago.
North American airlines experienced a 5.2 percent decline in demand, the steepest fall of any region. Capacity was reduced by 2.7 percent. While domestic demand has supported regional cargo carriers, routes to Europe have been hit by declines in export markets.
European cargo markets fell 4.0 percent and capacity grew 0.4 percent. Several European confidence indicators declined in March and much of Western Europe remains in or close to recession.
Middle East airlines’ cargo traffic grew 10.5 percent, continuing their remarkable start to 2013. The region has grown 12.4 percent faster for the year to date compared with the same period last year. In March, capacity was up 9.1 percent.
Latin American carriers saw demand fall 0.8 percent while capacity grew 2.6 percent. The underlying economic growth trend in the region is still solid and airlines are maintaining the improvement in demand since late 2012. Export growth to North America and China is supporting international freight routes.
African cargo markets grew 3.2 percent, benefitting from strong growth in regional developing economies. Capacity, however, grew by 10.0% which led to the load factor declining to 25.0 percent, the lowest of all regions.
IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.
All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures may be revised.
Total freight traffic market shares by region of carriers in terms of FTK are: Asia-Pacific 38.5%, North America 23.3%, Europe 21.5%, Middle East 12.5%, Latin America 3.1%, Africa 1.2%.
Uber Freight to Acquire Transplace in $2.2bn Deal
Uber Freight is to acquire logistics technology and solutions provider Transplace in a deal worth $2.25bn.
The company will pay up to $750m in common stock and the remainder in cash to TPG Capital, Transplace’s private equity owner, pending regulatory approval and closing conditions.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight, and former founder of the Uber-owned trucking start-up Otto.
Uber’s Big Play for Supply Chain
Transplace is one of the world's largest managed transportation and logistics networks, with 62,000 unique users on its platform and $11bn in freight under management. It offers truck brokerage and other capacity solutions, end-to-end visibility on cross border shipments, and a suite of digital solutions and consultancy services.
The purchase is the latest move by parent company Uber, which launched as a San Francisco cab-hailing app in 2011, to diversify its offering and create new revenue streams in all transport segments.
Transplace said the takeover comes amid a period of “accelerated transformation in logistics”, where globalisation, shipping and transport disruption, and widespread volatility are colliding.
Uber Freight plans to integrate the Transplace network into its own platform, which connects shippers and carriers in a dashboard that mirroring the intuitive experience found in its consumer vehicle booking and food ordering services.
“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” said Ron.
Frank McGuigan, CEO of Transplace, said the resulting merger will offer enhanced efficiency and transparency for shippers, and benefits of scale for carriers. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he added.
History of Uber Freight
Uber Freight was established in 2017 and separated into its own business unit the following year. In 2019 the company had expanded across the entire continental US, established a headquarters in Chicago. Later that year it launched its first international division in Europe, initially from a regional foothold in the Nertherlands, and later moving into Germany.
The logistics spinoff attracted a $500m investment from New York-based Greenbriar Equity Group in October 2020, and launched a new shipping platform for companies of all sizes in May, partly in response to a driver shortage in Canada.