Global air cargo growth halved by supply chain disruptions

The International Air Transport Association (IATA) released data for global air cargo markets showing slower growth in November 2021. Supply chain disruptions and capacity constraints impacted demand, despite economic conditions remaining favourable for the sector. 

As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons below are to November 2019 which followed a normal demand pattern.

• Global demand, measured in cargo tonne-kilometres (CTKs), was up 3.7 per cent compared to November 2019 (4.2 per cent for international operations). This was significantly lower than the 8.2 per cent growth seen in October 2021 (9.2 per cent for international operations) and in previous months
• Capacity was 7.6 per cent below November 2019 (-7.9 per cent for international operations). This was relatively unchanged from October. Capacity remains constrained with bottlenecks at key hubs
• Economic conditions continue to support air cargo growth, however supply chain disruptions are slowing growth. Several factors should be noted:
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  • Labour shortages, partly due to employees being in quarantine, insufficient storage space at some airports and processing backlogs exacerbated by the year end rush created supply chain disruptions. Several key airports, including John F. Kennedy International Airport (JFK), Los Angeles International Airport (LAX), and Amsterdam Airport Schiphol (AMS) reported congestion
  • Retail sales in the U.S. and China remain strong. In the U.S. retail sales were 23.5 per cent above November 2019 levels. And in China online sales for Singles’ Day were 60.8 per cent above their 2019 levels
  • Global goods trade rose 4.6 per cent in October (latest month of data), compared to pre-COVID-19 levels, the best rate of growth since June. Global industrial production was up 2.9 per cent over the same period
  • The inventory-to-sales ratio remains low. This is positive for air cargo as manufacturers turn to air cargo to rapidly meet demand
  • The recent surge in COVID-19 cases in many advanced economies has created strong demand for PPE shipments, which are usually carried by air
  • The November global Supplier Delivery Time Purchasing Managers Index (PMI) was at 36.4. While values below 50 are normally favourable for air cargo, in current conditions it points to delivery times lengthening because of supply bottlenecks. 

“Air cargo growth was halved in November compared to October because of supply chain disruptions,” said Willie Walsh, IATA’s Director General. “All economic indicators pointed towards continued strong demand, but the pressures of labour shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities. Manufacturers, for example, were unable to get vital goods to where they were needed, including PPE. Governments must act quickly to relieve pressure on global supply chains before it permanently dents the shape of the economic recovery from COVID-19.”  

To relieve supply chain disruptions in the air cargo industry, IATA is calling on governments to:

• Ensure that air crew operations are not hindered by COVID-19 restrictions designed for air travellers
• Implement the commitments governments made at the ICAO High Level Conference on COVID-19 to restore international connectivity, including for passenger travel. This will ramp-up vital cargo capacity with ‘belly’ space
• Provide innovative policy incentives to address labour shortages where they exist.

Support the World Health Organization (WHO) / International Labour Organization Action Group being formed to assure freedom of movement for international transport workers.

November Regional Performance

• Asia-Pacific airlines saw their international air cargo volumes increase 5.2 per cent in November 2021 compared to the same month in 2019. This was only slightly below the previous month’s 5.9 per cent expansion. International capacity in the region eased slightly in November, down 9.5 per cent compared to 2019
• North American carriers posted an 11.4 per cent increase in international cargo volumes in November 2021 compared to November 2019. This was significantly below October’s performance (20.3 per cent). Supply chain congestion at several key U.S. cargo hubs has affected growth. International capacity was down 0.1 per cent compared to November 2019
• European carriers saw a 0.3 per cent increase in international cargo volumes in November 2021 compared to the same month in 2019, but this was a significant drop in performance compared to October 2021 (7.1 per cent). European carriers have been affected by supply chain congestion and localized capacity constraints. International capacity was down 9.9 per cent in November 2021 compared to pre-COVID-19 levels and capacity on the key Europe to Asia route was down 7.3 per cent during the same period
• Middle Eastern carriers experienced a 3.4 per cent increase in international cargo volumes in November 2021, a significant drop in performance compared to the previous month (9.7 per cent). This was due to a deterioration in traffic on several key routes such as Middle East to Asia, and Middle East to North America. International capacity was down 9.7 per cent compared to November 2019, a small decrease compared to the previous month (8.4 per cent) 
• Latin American carriers reported a decline of 13.6 per cent in international cargo volumes in November compared to the 2019 period. This was the weakest performance of all regions and a significant deterioration from the previous month’s performance (-5.6 per cent). Capacity in November was down 20.1 per cent on pre-COVID-19 levels 
• African airlines’ saw international cargo volumes increase by 0.8 per cent in November, a significant deterioration from the previous month (9.8 per cent). International capacity was 5.2 per cent lower than pre-COVID-19 levels.