English Arabic Armenian Azerbaijani Chinese (Simplified) Chinese (Traditional) Czech Danish Dutch Estonian Filipino Finnish French Galician Georgian German Greek Hindi Hungarian Icelandic Indonesian Italian Japanese Korean Latvian Lithuanian Malay Maltese Norwegian Persian Polish Portuguese Russian Slovak Slovenian Spanish Swedish Thai Turkish Ukrainian Vietnamese
mexico-boosts-miami-air-cargo-volumeMIAMI: August 17, 2017. Miami International Airport has reported a 4.8 percent growth in cargo traffic for the first half of 2017 with...
turkish-cargo-helps-save-livesMOGADISHU: August 15, 2017. In March this year actor Ben Stiller and other celebrities launched a viral crowdfunding on behalf of the...
first-flight-out-for-hungarian-horsesBUDAPEST: August 15, 2017. Cargolux and Hellmann Worldwide Logistics have flown 14 Hungarian-bred racehorses from Budapest via...
european-commission-supports-hna-purchase-of-frankfurt-hahn-airportFRANKFURT HAHN: August 10, 2017. The HNA Group has completed its acquisition of Frankfurt-Hahn airport from the German state of...
matson-to-add-marshall-islands-serviceHONOLULU: AUGUST 07, 2017. Matson is adding to its Marshall Islands (RMI) service in the first quarter of 2018 with a new biweekly...
fortune-50-companies-back-no-fee-recruitment-in-supply-chainsNEW YORK, NY: AUGUST 07, 2017. Ford, General Motors, Hormel Foods, Marriott Hotels and Michael Kors have agreed to promote ethical...

Business growth: saying it with flowers?

In any highly-cyclical small-margin business a drop in unit revenues of almost 11 percent year-over-year (YoY) and of 8.5 percent month-over-month (MoM) would make all alarm bells ring.

In the first month of 2015, such a drop in unit revenues (in this case revenues per kg, measured in US$) is exactly what happened to the worldwide air cargo business. Yet, we maintain that alarm bells can remain silent, for three reasons.

Firstly, a good case can be made for the statement that almost 2/3 of the yield drop was caused by decreasing surcharges, perhaps a surprising development for all those who referred recently to what they called "anecdotal evidence" that surcharges have not come down. The reason behind this decrease would seem to be good news for everyone involved, with a possible exception for the oil companies. A second element in the US$-yield decrease was the deteriorating exchange rates of virtually all currencies against the dollar. Lastly, there was the usual effect of January showing lower yields than December: -4.4 percent in Jan 2013, and -3.0 percent in Jan 2014.

A bad start? We think not. Business as usual then? Difficult to say given the industry's diverging performance from one region to another. Worldwide January volumes were up by 3.2 percent year-over-year (YoY), not great, but also not too bad given the fact that January 2014 was already part of the recovery that started in Autumn 2013.

North America and Asia Pacific were the origin regions with the largest YoY volume growth (8.3 percent and 5.5 percent respectively), the former also being the only region that hardly lost volume compared to December. A substantial part of the growth in the USA came from Pacific States business destined for Asia, presumably a nice windfall from the port problems... The MoM performance was particularly worrisome for the region Central & South America: 19 percent volume loss accompanied by a yield drop of 10 percent. January also marked this region's first YoY volume contraction. Africa had the smallest YoY  percent-growth in twelve months, whilst Europe and the Middle East & South Asia (MESA) showed "business as usual" by continuing their below average growth pattern.

Saying it with flowers?

For longer term developments, this month we take a quick look at a specific part of the perishables markets over the past three years: flowers. The role of flowers in the total perishables palette has diminished. Whilst the overall air cargo volume in 2014 was 9.0 percent up on 2012, and perishables in general even by 23 percent, WorldACD recorded a growth of 13 percent in the volume of flowers carried by air.

At a conference held in South Africa recently, Amsterdam Schiphol urged the air cargo sector to develop answers to technological developments in shipping. Understandably so, since Western Europe – being the main destination for flowers – stands to suffer most from a growth in flower markets lagging behind the general growth in perishables. Other destinations thrived, for example the Gulf Area with inbound growth of 57 percent in two years.

Worldwide yields from the transport of flowers decreased by more than the overall yields between 2012 and 2014: -10.2 percent vs. -5.2 percent.

We saw some notable deviations from this trend, however. Flower transport from South America, although still the highest yielding in the business, suffered a yield drop of 13.5 percent. At the other side of the Atlantic, Europe, lost only 0.1 percent in yield in the same period. But the flowers from the origin North America really stood out: a volume increase of 12 percent accompanied by a yield increase of 11.9 percent.

- WorldACD provides air cargo market data based on airline sources covering all countries.

- powered by Quickchilli.com -