IATA sees geopolitical factors denting demand for air cargo during 2019, and forecasts just 2% growth for the entire year.
“Protectionism, trade friction, BREXIT, and anti-globalization rhetoric are part of a genre of developments that pose real risk to our business…and broadly across the economies of the world,” says IATA chief executive Alexandre de Juniac.
He made the remarks at IATA’s World Cargo Symposium, which is being held in Singapore this year.
IATA figures indicate that air cargo demand grew by 3.5% in 2018, but that this was already considerably slower than 2017’s “extraordinary” growth of 9.7%.
The slowdown commenced in mid-2018, fueled by “sagging consumer confidence, and geopolitical headwinds.”
In January, IATA observed that air cargo demand actually contracted by 1.8% year-on-year.
Despite IATA’s gloomy forecast for 2019, de Juniac remains optimistic, especially for the Asia-Pacific. Two trends supporting air cargo in the region are growing populations and the rise of strong manufacturing hubs in countries such as Thailand and Vietnam.
“This will fuel more air cargo movements in the region.”
In addition, Asia’s growing middle class will support sectors such as eCommerce, pharmaceuticals, and perishables.
“These cargo verticals require strong air cargo hubs with efficient and quality cargo handling.”
On the topic of cargo safety, de Juniac singled out the transport of lithium batteries. Transporting such batteries is safe if they are properly labelled according to global standards, but “rogue shippers” are allowed to flout the rules.
“The problem is that global standards are being ignored by rogue shippers,” he says. “And governments are not enforcing the rules. In some cases, we see more effort going into stopping counterfeit production of Louis Vuitton bags than lithium batteries. Both need attention, but lithium batteries are a safety risk.”