After two bad years of declining international air cargo volumes, we should be in for a good year – possibly somewhere in the order of 10% growth based on our latest forecast. For context, that would put us somewhere close to where we were at the end of 2021. Should we believe our own numbers? If cross border e-commerce traffic remains strong, manufacturing recovers and the outlook for global growth continues to improve then it is likely that we also see a recovery in air cargo traffic. The ongoing situation in the Red Sea forcing longer routings between Asia and Europe is also likely to increase the demand for air (and rail) freight on that lane.
Posts tagged as “Manufacturing”
Recent EU survey data does not point to an immediate recovery nor further deterioration of trade relevant economic activity. Manufacturing activity continues to be weak, but overall retail sales development has been somewhat positive. Several indicators are looking positive for Southern Europe, which could lead a recovery of economic activity. This article includes an interactive dashboard with key economic and employment sentiment indexes, confidence indicators and industry and retail data for the 27 EU Member States and Türkiye.
Global trade growth expectations have been successively downgraded over the past twelve months and year end 2023 numbers are likely to come out at about around 1%, according to December estimates prepared by the OECD. Long haul trade may even be solidly negative based on what we have been seeing for key trade generators such as China, the European Union, and the United States. Trade growth can only pick up if manufacturing activity does the same. The bulk of world trade consists in the movement of industrial inputs, intermediate and capital goods. As such global trade and industrial production are directly linked. Manufacturing has been weak all throughout 2023, but an improvement could take place in the second and third quarter of 2024.
Brazilian air trade grew by 2% in 2022 and is now about 14% above 2019 levels. As with other air cargo markets around the world the first half of the year was strong while volumes declined in the second half of the year and particularly in November and December. This is in line with a drop in manufacturing activity in the last months of the year. Manufacturing activity is expected to recover in 2023. In the medium-term Brazil could well benefit from a trend to dual sourcing.
Transatlantic air cargo was a real bright spot in 2022, both in terms of volumes and market rates. Containerised shipping did not do as well in volume terms, but rates have remained strong even as they have tumbled back down to earth in other markets. This analysis discusses the interplay between demand, capacity, and the relative competitive position between air and sea freight and how this is likely to evolve over the next year.