Global air cargo begins to stabilize
IATA has released their March data for international traffic and from a cargo perspective, it appears that freight demand is beginning to stabilize. According to the report, freight demand for the past four months is hovering between -21% to -24% compared to the same time period in 2008.
“The only glimmer of hope is that cargo demand has stabilised this month although at the shockingly low level of -21.4%,” said Bisignani. For the fourth consecutive month international cargo demand is hovering in the -21% to -24% region as a result of the sharp drop in world trade. “It’s not the end of the recession, but we may have found the floor,” said Bisignani.
IATA contributed at least a portion of the cargo slump to companies with excess inventory.
The severity of air freight slump is at least partly driven by manufacturers seeking to correct large inventory overhangs that emerged in late 2008. The stabilisation of the inventory to sales ratio has in turn stabilised air freight demand. Recovery, however, depends on purchasing that can deplete the inventory overhang. Inventory levels remain high and final demand is weak.
Access the complete numbers for March here.
Delta Airlines posts loss; plans to ground freighters
Not exactly great news for my favorite airline. Today, Delta reported a $794 million first-quarter net loss, or $0.96 per diluted share. Delta cited slower demand for travel brought on by the current recession as reason for the loss.
“Despite the worst economic recession in our lifetime, the fundamental strength of Delta’s business allowed us to deliver breakeven results this quarter, excluding fuel hedge losses and special items. These results would not be possible without the hard work of all Delta employees – they are running a great airline while executing a seamless integration in the midst of this very difficult economic environment.,” said Richard Anderson, Delta’s chief executive officer. “We remain focused on making disciplined decisions about capacity, costs and capital, achieving merger synergies and finding new sources of revenue.”
On the cargo side of the business, cargo revenue declined 44 percent or $146 million during the first quarter. Again reasons for the decrease were attributed to the current global recession, decline in fuel surcharge revenue, and decreased demand for air cargo services.
As a result, Delta has announced plans to ground it’s entire fleet of 14 B747-200 freighter aircraft effective Dec. 31, 2009 due to that fleet’s age and inefficiency.
Delta also announced plans to reduce international capacity by 10%, compared to the prior year, beginning in September 2009.
Rail traffic down for the week
I just came across the Association of American Railroads’ (AAR) website and found it to have excellent information regarding rail traffic in North America. For anyone interested, the AAR puts out a weekly traffic and carloading report for rail movements in the U.S., Canada, and Mexico. The latest weekly update shows that U.S railroads originated 248,391 cars during the week ending April 11th; a decrease of 24.5 percent compared to the same week during 2008. Major reasons cited for the decrease are the global economic difficulties and the Easter holiday.
Overall, rail traffic isn’t immune to the current economic recession:
Combined North American rail volume for the first 14 weeks of 2009 on 14 reporting U.S., Canadian and Mexican railroads totaled 4,784,613 carloads, down 17.7 percent from last year, and 3,238,948 trailers and containers, down 15.6 percent from last year.
I don’t get involved with domestic rail freight other than inbound ocean containers moving on a through bill of lading into inland points, but I did find the information provided by the AAR very informative. I will be checking back periodically and providing feedback where relevant.
You can check out the AAR’s 2009 press releases here.
Hong Kong Ocean Terminals Video
Anyone importing from Hong Kong or South China knows of the massive operations that are conducted at the ports. This video shows a fairly good overview of the services provided at the port of Hong Kong.
