December 2017 saw a year-over-year (YoY) growth of 4.5% in worldwide air cargo volumes. Main contributors were the origin regions Asia Pacific (+8%) and North America (+5.1%). Europe’s growth was 2.2% only, whilst air cargo originating in Africa contracted by 7.5%. MESA (Middle East & South Asia) and Central & South America saw an increase in step with the worldwide average. It was Europe that grew most as a destination (+6.8%). Yield developments, however, drew most of the attention: wordwide yields were up by 10% YoY, measured in EUR, and by a whopping 23.5% (!) in USD. Compared to November, USD-yields rose by 2.5%, another noteworthy feature, as yields usually drop between November and December.
For the 4th quarter as a whole, YoY volume growth was 6.6%, impressive in the light of the fact that air cargo – after years of a lacklustre performance – started to grow again as from September 2016. Of course, this fact made it more ‘difficult’ for the industry to record strong year-over-year volume growth figures in the latter part of 2017. However, that difficulty did not stand in the way of serious revenue growth for the airlines in Q4, as yields in USD started to grow with double digit percentages precisely as from September 2017… Capacity shortages in a number of markets, rate-of-exchange fluctuations and rising oil prices all had a role to play in the resulting worldwide airline revenue growth of over 25% in the last quarter of a truly remarkable air cargo year.
We can safely call 2017 a real bumper year. Many records were broken, and most signs stood on green for almost the entire year. Yet, the year was no different from other years in the sense that 2017 also knew winners and losers: origin & destination cities, sectors and companies that grew, others that lagged behind. Here is our top level YoY overview.
Whilst general cargo increased by 10.5%, specific cargo products grew with 7.4%, making for an overall volume growth of 9.6% (10.8% in DTK). Yield improvement (in USD) was also larger in general cargo (+9.4% vs +5.9%). The categories with the highest volume growth were Vulnerables & High Tech, Pharmaceuticals and Flowers, showing a USD-yield growth of 8%, 5.4% and 1% respectively.
The Top-20 forwarders in the world remained an exclusive club, not allowing new members to join them: their growth was in line with the overall market growth, although the Top-5 (DHL Global Forwarding, Kuehe + Nagel, DB Schenker, Expeditors Int’l and Panalpina) as a group outgrew their colleagues in volume (+16% vs +14%). GSA’s fared best in Asia Pacific (+15% volume growth), Europe (+12%) and MESA (+11%).
Of the 50 largest origin cities, four recorded a growth of well over 20%: Hanoi (leading with 25.5%), Brussels, Colombo and Ho Chi Minh City. Hong Kong remained our Nr 1 origin, growing 16%. Of the top-10 origins, Amsterdam and Los Angeles were the ones showing slightly less growth than the worldwide average. Among the largest destinations, Doha (leading with 42%), Shanghai, Osaka, Hanoi, Mexico City, Chennai and Campinas all grew their incoming volumes by more than 20%.
The shares of total business for the individual airline groups remained reasonably stable. The exception? Airlines from Africa: whilst business from their region lagged behind, their overall growth was much higher than the growth realised by other groups. The airlines based in Asia Pacific grew a bit more than average in 2017, whilst airlines based in Europe, the Americas and MESA lagged behind, albeit only slightly, thus giving up a tiny part of their overall share of the pie.
With positive trends continuing thoughout the past year, the big question is of course how long all this will continue. As Mark Twain reportedly once said, it is difficult to make predictions, particularly about the future…
