Could Chinese slowdown be contributing to the weak cargo market?

Though Asia Pacific airlines reported an increased passenger demand compared to this time last year, international air cargo shipments have fallen, possibly as a result of the Chinese economic slowdown.

Though Asia Pacific airlines reported an increased passenger demand compared to this time last year, international air cargo shipments have fallen.

According to an article on Air Cargo World, demand for cargo measured in freight tonne kilometers was 2.2 percent less than last year. This is yet another setback in the recovery of the air cargo industry, which experienced a slump during the global economic recession and has since faced increased competition from ground and seas shipping options.

At the same time, due to an increase in passenger travel, shipping capacity rose by 0.3 percent.

"Air cargo markets [...] remain depressed, with Asian airlines reporting a 2.4 percent decline in freight traffic for the first six months of the year, reflecting persistent weakness in global trade conditions," said AAPA director general Andrew Herdman. 

Part of the problem may be that the Chinese economy, which for the last 30 years has averaged 10 percent growth, may be beginning to slow down. A recent report by Bloomberg found that the nation's manufacturing sector was the weakest it had been in eleven months. It's gotten to the point where Chinese government officials have ordered a halt to the construction of new state office buildings in order to cut spending and hold back rising property prices.

Since China remains one of the world's manufacturing powerhouses, a slowdown there may have broad implications for the world economy, especially shipping. That's why carriers need to act now to streamline their supply chains by adopting proof of condition services like CargoSnapshot. This will help them monitor freight and improve their standing with customers.

Posted in Cargo

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