Growing trade tensions continue to threaten the growth of the airfreight industry, with director general and CEO of the International Air Transport Association (Iata), Alexandre de Juniac, commenting that airline order books are weakening, export orders are declining and supply delivery times are lengthening.
“The early focus of tariffs was not on products typically carried by air. But as the list of tariffs grows so does the air cargo industry’s vulnerability,” said De Juniac. “Souring trading relations will also eventually impact business travel.”
No-one wins in trade wars, according to him, and although data shows a marginal 2.3% increase in global demand for August this year, manufacturing companies’ declining export orders and the longer supplier delivery times reported by Asian and European manufacturers suggest a decrease in the need for speed which means shippers can look to the cheaper oceanfreight options as opposed to airfreight.
The World Trade Organisation (WTO) has also revised its global trade growth projections for 2018 from 4.4% to 3.7% amid the trade wars. Director general of the WTO, Roberto Azevêdo, describes trade growth as “remaining strong” but says the downgrade “reflects the heightened tensions that we are seeing between major trading partners”.
It is more critical than ever for governments to work through their differences and show restraint, he said.
As the list of tariffs grows so does the air cargo industry’s vulnerability. – Alexandre De Juniac
