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Airfreight - A Key Indicator of Economic Activity
Economic activity and airfreight development are closely intertwined. Logistics executives closely follow the development of airfreight trends to manage and plan supply chain strategies, as do economists and market analysts - because airfreight trends are a key indicator of economic activity overall.
By researching the global airfreight trends, we can conclude that airfreight has been declining year over year in both volume and demand levels in 2019. The majority of international airlines reported declines in cargo traffic in October 2019 and the overall 2019 year to date.
After a period of noticeable growth in 2017, and moderate growth in 2018; the 2019 decline is linked namely to:
- Continued Brexit-related trade uncertainty in Europe,
- Ongoing trade tensions between the United States and China, and
- Geopolitical strains in the Middle East.
On a positive note, even though air cargo demand and volume have lost some momentum, the trend hasn't shown in the area of technology development. The leading airfreight forwarders compete by offering service using technological savvy solutions aiming to become more attractive to shippers.
Going back to the airfreight forecast published by Boeing World Air Cargo Forecast Team in early 2018, the year 2019 hasn’t fully validated the forecasted trend yet. The published document anticipated:
- Further significant growth in the airfreight industry,
- Growth through E-commerce popularity,
- Asia leading future growth faster than world average, and
- Freighters (cargo-only aircrafts) to continue to carry more than half of the worlds air cargo demand.
We could note that as the economy strengthens and freighters fulfill the demand, the airfreight growth will continue to expand throughout the years to come. The air cargo transportation sector holds a unique position in terms of less tonnage yet high value in the global trade. If logistics service providers can provide fast, reliable, and secure service and offer solution to unique capacity considerations, they can give a distinct advantage to shippers. It's effect then should be a higher value of service that could boost the airfreight industry revenue.
Contributor: Natalie Brandlova and Sherryl Heidma
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About Allyn International
Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.