Ostensibly, global airfreight volumes have been falling for 10 consecutive months, which is being likened to the situation during the 2008 financial crisis.
The WSJ would like us to believe that this is due to China’s economic slowdown – but, then, the WSJ readily uses that as an excuse for almost anything. In the container shipping industry, freight capacity rose 1.9% this year, through August – which provides good evidence that shipping, per se, isn’t down – it’s just some of the air shipping that is. It could be, therefore, that air shipping decline might be due to one or two other things (at least): 1 – that shippers are looking for cheaper ways to move goods and see no need for the extra cost of air freight, or 2 – that some of the larger companies are purchasing and using their own planes to airfreight the goods that need to be moved quickly. The airlines are seeing significant reductions in their shipping capacities being used – they fly more jets to meet demand from passengers which automatically expands their airfreight capacity, at a time when the need isn’t there. And at the same time, the expansion of capacity makes the stats seem to imply that air shipping is down, when actually air shipping capacity has simply been increased. Sounds like they might have just planned for something and wished that it would happen, rather than working to make that so. The phenomenon seems more specific to U.S. air carriers, rather than Asian carriers, such as Cathay Pacific Airways. The WSJ has already started to worry about the current surplus of air cargo freight space as impacting plane makers such as Boeing, Boeing’s flagship 777 jet has been relied on by cargo haulers. And those planes made up 33% of Boeing’s orders in 2018; 65% thus far in 2019. Of course, many countries buy Boeing’s 777 jets – so a situation that seems particularly specific to U.S. air cargo freighting and not other countries’ shipping won’t necessarily effect Boeing in the long run. The Journal ends their piece by admitting that air cargo isn’t usually a make-or-break market for the aviation industry, but that it’s currently proving “inconvenient.” I’d say that it might, however, be proving “convenient” for those who want to argue against the utilization of tariffs.