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In the last month of 2019, worldwide air cargo decreased by 1.7% YoY, the smallest YoY decrease since January 2019, but a decrease nevertheless. The year ended with a mixed picture, not with the positive figures the air cargo world had hoped for.

The results for the full year 2019 were not impressive: worldwide revenue, measured in USD, fell by 11.7% compared to the top year 2018, whilst it did not grow compared to 2017 either. The main reason was a YoY yield drop of 7.6%, as total weight fell by 4.4%. And although pharmaceuticals and vulnerable goods (including High-Tech) both showed growth of around 8.5% in volume, their yield drops – though not as steep as in general cargo – were a cause for concern for the airlines.

The origin Europe took the hardest hit in 2019: it lost more than 16% of its revenues (in USD) of the previous year, equal to -12% in EUR, with Germany accounting for half of Europe’s woes. As reported throughout the year, the smaller regions of Africa and Latin America fared better than the larger regions in the Northern hemisphere. Whilst in Asia Pacific and Europe outbound was slightly better than inbound, the opposite was the case for North America. This brings us to the main story of the past year: the influence of Trump’s trade wars on the world’s trade flows.

Many have attributed (part of) the disappointing 2019-results for air cargo to the worsening USA – China relationship, but trying to establish where the consequences of the trade war were felt most, is not all that easy. What to think of the following?

Total China inbound dropped by 6%, but China outbound increased by 2.7% YoY in total, increased by 2.8% to Europe, and dropped by only 0.3% to the USA. That certainly looks a whole lot better than the worldwide drop of 4.4% YoY. But it is not the whole story, as one of China’s great gateways, Hong Kong, lagged behind considerably: overall export by air fell by 5.5%, but the decrease in business to Europe and the USA was biting much harder (-10.8% and -14.4% respectively). The USA, on the other hand, saw total outbound decrease by 5.3% YoY, and lost less than that in its air cargo business to China (-4.9%), but more to Europe (-5.7%). And inbound USA stood at -4% YoY.

Last but not least, a few words on the upbeat messages we have seen lately, based on flight information. As we all know, operational (flight) data should be ‘handled with care’ when trying to read into them how specific markets are developing. A good example is Japan in Q4 of 2019. Based on our data for freight carried on flights ex-Japan, one sees a continuing YoY improvement over the previous three quarters. But when considering market data (based on origin and destination from Air Way Bills, AWB’s), the picture is drastically different. Japan’s YoY market performance was worst in Q4 2019… In other words, flights ex Japan may have done better, but not with business originating in Japan. As a matter of fact, an increase in cargo originating in China, carried on flights ex-Japan, is an important reason for the difference observed.