Subscribe to our free, weekly email newsletter!



Taxes and regulations thwart air cargo growth

By Patrick Burnson, Executive Editor
September 07, 2011

With the air cargo market continuing its decline, shippers are demanding that global governing bodies reassess their positions on taxes and new regulations.

Freight markets, which reflect economic sentiment more quickly than passenger markets, showed a decline of 0.4 percent in July compared to the previous year. The nature of the weakness has changed. In 2010, airlines were losing market share to other modes of transport as world trade expanded. The earthquake and tsunami in Japan, coupled with the general economic gloom are now the main driving factors of continued weakness.

Asia-Pacific carriers continue to show the weakest freight performance with a 3.6 percent decline compared to July 2010. Middle East and Latin American carriers showed the strongest performance with gains of 8.4 percent and 8.2 percent respectively.

Freight load factors have declined significantly (1.8 percentage points) to the pre-recession level of 45.0 percent. Asia-Pacific carriers, the largest in the market, have seen load factors slip to 58.1 percent (from 60.2 percent in July 2010). While the region suffers from a major imbalance with strong outward flows of manufactured goods and weak inbound traffic, the scale of their home carrier operations allows for better capacity utilization.

According to the International Air Transport Association (IATA), some of the challenges have a high percentage of government-made content.

“The recent downsizing of Air Berlin is a clear reminder of the high cost of the German departure tax on the economy, jobs and communities. Governments should not compromise aviation’s role as an economic catalyst for the short-term revenue gain of gratuitous taxation—particularly when economies remain weak,” IATA noted in a recent report.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

FTR says both spot rates and contract rates are heading up in a full capacity environment and with the fall shipping season rapidly approaching, it explained conditions for shippers could further deteriorate.

Read how others are using Business Process Management to achieve ERP success with Microsoft Dynamics AX. Download the free white paper now.

Now that Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

Article Topics

Blogs · Air Freight · Air Cargo · Global Trade · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA