TIACA foresees slowdown in air cargo market continuing until 2nd half of 2020
THE International Air Cargo Association (TIACA) is warning that the air cargo industry will not experience a peak season on any major trades this year and the weak market conditions will drag on to the second half of 2020
THE International Air Cargo Association (TIACA) is warning that the air cargo industry will not experience a peak season on any major trades this year and the weak market conditions will drag on to the second half of 2020.
'We are already at the end of November, and there are some good days, and sometimes even a week that is not too bad, but we will not have a peak period like we saw in the previous two or three years,' TIACA chairman Steven Polmans told JOC.com at the group's annual summit. 'I haven't met many people that are positive.'
The pessimistic outlook comes as trade friction continues to dent business confidence in China, Europe and the United States, and Brexit uncertainty is combining with a weakening European auto industry to slow down demand, reported IHS Media.
'The first six months of 2020 will be difficult before we see an improvement in demand in the second six months,' said Mr Polmans. 'There is still the question of what happens after Brexit, what will happen with the trade wars, the Middle East, and the oil price.'
According to a recently published Freight Investor Service (FIS) report, there is little on the horizon that could boost an already weak year without a sudden surge in volume out of Asia over the next two weeks.
'Fundamental basket routes have run out of steam as we reach the last half of November, with China to Europe going completely flat, and China to US with a marginal gain of (one per cent) over what has been a disappointing, if highly volatile, fourth quarter peak,' the FIS report was cited as saying.
Mr Polmans said his lack of optimism going into 2020 was due to the absence of a balanced global environment that would enable international trade to rebound.
'This is the biggest challenge that air cargo is facing,' he said. 'The most important factor is that we are an industry that needs a certain growth percentage or air cargo cannot blossom. International trade needs a level of calmness to perform.'
He continued: 'There is a whole level of uncertainty that has been created today - Brexit is on, then it's off, then on again.'
He added that the trade wars and retaliatory tariffs are 'not helping international trade and a lot of countries are having a nationalistic reflex to the trade situations they are facing, and this is leading them to look for local and bilateral solutions rather than multilateral solutions. It is not an environment where global trade can flourish.'