Global air cargo demand grew 12.7% in May compared to a year ago, reflecting ongoing improvement in world trade, IATA said in its May Air Freight Market analysis, but the cyclical growth period may have peaked.

Though new export orders reached a near six-year high in May, the global purchasing managers’ index (PMI) has slipped since its February peak, IATA said.

“Unless we see further gains in manufacturing export order books … air freight growth [will start] moderating towards the end of the year,” IATA senior economist David Oxley said. “Moreover, although the inventory-to-sales ratio remains lower than it was a year ago, it has stopped falling and is currently rising modestly.”

Air freight capacity worldwide grew 5.2% year-over-year (YOY) in May, IATA said, resulting in a total market freight load factor of 45.2%, its highest level since July 2014.

“In the opening months of 2017, the upward trend in demand was broadly matching that of supply,” Oxley said. “However the jump in [demand] in May far exceeded that of capacity … all told, the industry-wide load factor has now risen by four percentage points in seasonally adjusted terms since it low point in early 2016.”

IATA forecast air cargo demand will grow 8% year-over-year (YOY) during the 2017 third quarter.

Carriers in Europe and Asia, which combined carry 61% of the world’s air freight, again showed significant growth in May, as demand grew 15% and 11.3% YOY, respectively. Capacity moderated to 5.7% and 6.2% YOY growth, respectively, producing freight load factors of 46.5% for Europe and 54.7% for the Asia-Pacific region.

North American carriers, with a 21% share of global air cargo traffic, showed a 13.9% increase in demand, with 4.1% capacity growth, producing a 36.4% freight load factor. North America’s international air freight demand increased 19.3% YOY in May, its fastest pace since August 2010.

Air cargo demand rebounded for Middle East carriers in May, posting 10.2% YOY growth, compared to 3.1% YOY growth in April.

African carriers showed a 28.8% increase in international air freight demand, as its market to and from Asia continues to grow. “While still a small route, [demand] has surged by more than 57% so far this year,” Oxley said.

Latin American carriers’ international air cargo demand increased 5.7% YOY for the month, but capacity growth was limited to 0.1%, resulting in an international freight load factor of 37.9%.

“May was another good month for air cargo … but the industry can’t afford to rest on its laurels,” IATA DG and CEO Alexandre de Juniac said. “With indications that the cyclical growth period may have peaked, the onus is on the industry to improve is value proposition by accelerating process modernization and enhancing customer-centricity.”

Mark Nensel