IATA: Cargo and Passengers down sharply in November 2008

Quotes Giovanni Bisignani, IATA’s CEO, the “…drop in international cargo is shocking…“. Maybe, but it shouldn’t be too surprising. These days cash is king and companies will do just about anything to save a buck or two, including rethinking what kinds of cargo can/should ship by sea as opposed to air. Years ago I was heavily involved in the air freight transport of high-tech goods, I’d imagine a number of those goods that traditionally ship by air are now being sent by sea.

“The 13.5% drop in international cargo is shocking. As air cargo handles 35% of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown. By comparison, this is largest drop since 2001, in the aftermath of September 11,” said Giovanni Bisignani, IATA’s Director General and CEO.

“The industry is now shrinking by all measures. The 1.0% capacity cut in international passenger markets in November could not keep pace with the 4.6% fall in passenger demand. We can expect deep losses in the fourth quarter,” said Bisignani.

Asia Air Cargo Volumes Down

I just read a press release from the Association of Asia Pacific Airlines regarding the state of air cargo in Asia. According to the press release, Asia cargo volumes measured in freight tonne kilometers are down 15.5% compared to the same period last year.

Due to weakening global demand, many airlines have reduced capacity. November marked the eighth straight month of declining capacity.

Commenting on the results, Mr. Andrew Herdman, AAPA Director General said, “For the
first eleven months of 2008, AAPA international passenger traffic declined by a marginal
0.3% in RPK terms, whilst AAPA international freight traffic registered a 4.3% decline, in
FTK terms, for the same period. However, the dramatic slowdown in global economic
activity in the second half of the year is now reflected in sharply weaker demand for air
travel and cargo shipments.”

Mr. Herdman also added:

Mr. Herdman added, “The recent plunge in oil prices provides a measure of relief, but
market conditions are expected to remain extremely difficult moving into 2009, forcing
airlines to adopt additional cost-saving measures, including capacity cutbacks and
deferral of planned capital expenditures.”

Click here for the complete report. The report is under their press release section.

U.S. Domestic Truck Tonnage Up

According to a report from the ATA (American Trucking Association), U.S. domestic truck tonnage during the month of November increased 1.7 percent over the previous month, marking the first increase in volumes since June.

Although, it is not all good news as domestic volumes are still down significantly.

Via Trucknews.com:

November’s tonnage was 1.8% lower than November 2007, marking the second straight year-over-year decrease.

But despite the uptick in November, the ATA is not throwing any parties. The association says the freight outlook remains bleak “Don’t let November’s increase in the seasonally adjusted index fool you,” said ATA chief economist, Bob Costello, noting the figure is seasonally-adjusted. “Freight volumes were down substantially before any seasonality is taken out of the data.”

ABX Air to layoff 1,000

You knew this was coming ever since DHL Express announced that they were going to exit the US domestic express market.

Via Recordherald.com:

“We have known that this day was coming since DHL announced on November 10 that it would pull out of the U.S. domestic express package market, but it is still a very difficult time for our loyal ABX Air employees who have worked very hard for DHL and its customers,” said Joe Hete, president and CEO of ABX parent Air Transport Services Group.

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