IATA: Supply chain disruptions halve cargo growth in Nov.

Published January 12, 2022, 10:08 AM

by Emmie V. Abadilla

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Disrupted supply chains and capacity constraints halved the growth of global air cargo in November 2021, according to the latest data from the International Air Transport Association (IATA).

While economic conditions continue to boost air cargo demand, supply chain disruptions pulled down growth.

“All economic indicators pointed towards continued strong demand, but the pressures of labor shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities,” explained Willie Walsh, IATA’s Director General.

“Manufacturers, for example, were unable to get vital goods to where they were needed, including PPE. Governments must act quickly to relieve pressure on global supply chains before it permanently dents the shape of the economic recovery from COVID-19,” he pointed out.

The recent surge in COVID-19 cases in many advanced economies created strong demand for PPE shipments.

However, labor shortages, partly due to employees being in quarantine, insufficient storage space at some airports and processing backlogs exacerbated by the year end rush created supply chain disruptions.

Overall, global demand, measured in cargo tonne-kilometres (CTKs), was up 3.7 percent compared to November 2019 (4.2 percent for international operations).

This was significantly lower than the 8.2 percent growth seen in October 2021 (9.2 percent for international operations) and in previous months.

Capacity was 7.6 percent below November 2019 (-7.9 percent for international operations).

This was relatively unchanged from October. Capacity remains constrained with bottlenecks at key hubs.are usually carried by air.

(As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons were made against November 2019, which followed a normal demand pattern.)

To relieve supply chain disruptions in the air cargo industry, IATA called on governments to ensure that air crew operations are not hindered by COVID-19 restrictions designed for air travelers.

Governments should also implement the commitments they made at the ICAO High Level Conference on COVID-19 to restore international connectivity, including for passenger travel. This will ramp-up vital cargo capacity with “belly” space.

In addition, governments should provide policy incentives to address labor shortages where they exist and support the World Health Organization / International Labour Organization Action Group being formed to assure freedom of movement for international transport workers.

In terms of regional performance, Asia-Pacific airlines saw their international air cargo volumes increase 5.2 percent in November 2021 versus the same month in 2019. This was only slightly below the previous month’s 5.9 per cent expansion.

International capacity in the region eased slightly in November, down 9.5 percent compared to 2019.

Middle Eastern carriers experienced a 3.4 percent increase in international cargo volumes in November 2021, a significant drop in performance compared to the previous month (9.7 percent).

This was due to a deterioration in traffic on several key routes such as Middle East-Asia, and Middle East-North America.

International capacity was down 9.7 percent compared to November 2019, a small decrease compared to the previous month (8.4 percent).

North American carriers posted an 11.4 percent increase in international cargo volumes in November 2021 compared to November 2019. This was significantly below October’s performance (20.3 percent).

Supply chain congestion at several key US cargo hubs has affected growth. International capacity was down 0.1 percent compared to November 2019.

Latin American carriers reported a decline of 13.6 percent in international cargo volumes in November compared to the 2019 period.

This was the weakest performance of all regions and a significant deterioration from the previous month’s performance (-5.6 percent. Capacity in November was down 20.1percent on pre-crisis levels.

European carriers saw a 0.3 percent increase in international cargo volumes in November 2021 compared to the same month in 2019, but this was a significant drop in performance compared to October 2021 (7.1percent ).

European carriers have been affected by supply chain congestion and localized capacity constraints. International capacity was down 9.9 percent in November 2021 compared to pre-crisis levels and capacity on the key Europe-Asia route was down 7.3 percent during the same period.

African airlines’ saw international cargo volumes increase by 0.8 percent in November, a significant deterioration from the previous month (9.8 percent). International capacity was 5.2 percent lower than pre-crisis levels.