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28 March 2024

UAE air cargo rank 3rd by 2018: Iata

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By Staff

Thanks to the fast-growing UAE aviation sector and strong contribution by the new entrant Dubai World Central, the UAE is set to replace Germany to become the world’s third largest air cargo market by 2018, according to the International Air Transport Association (Iata) forecast published on Wednesday.

“The US, China and the UAE will each be adding more than one million additional tonnes of freight by 2018 compared to today. The UAE will have replaced Germany as the third largest market,” Iata said in its Airline Industry Forecast 2014-2018.

By 2018, the 10 largest international freight markets will be the US (10,054,000 tonnes), China (5,639,000), the UAE (4,974,000), Germany (4,763,000), Hong Kong (4,648,000), Republic of Korea (3,487,000), Japan (3,480,000), the United Kingdom (2,808,000), Chinese Taipei (2,350,000) and India (2,223,000).

The Middle East is forecast to be the fastest growing region over the forecast period with a CAGR of 4.7 per cent.

The second-fastest growing market, Africa, will have a CAGR of 4.4 per cent. Asia-Pacific and Latin America, both with a CAGR of 3.8 per cent, will be the joint third-fastest growing markets.

The mature markets of Europe and North America will grow at 3.0 per cent CAGR and 2.8 per cent CAGR, respectively.

Iran is expected to be the fastest growing country (of nations with more than 100,000 tonnes of cargo per year) for air freight volumes over the forecasting horizon with a CAGR of 7 per cent per annum. However, it is growing from a low base so it will add just 44,000 tonnes of freight by 2018 for a total of 156,000 tonnes.

The second fastest-growing market, India, will experience a CAGR of 6.8 per cent to add 622,000 extra tonnes. Bangladesh (339,000 total freight tonnes), Ethiopia (319,000) and Nigeria (276,000) make up the remainder of the top five.

Another notable growth country will be Qatar. With a CAGR of 5.7 per cent it will be the sixth-fastest growing and it will see 361,000 additional tonnes to take its total freight tonnes to 1,484,000.

Global growth

International freight volumes are expected to increase at a compound annual growth rate (CAGR) of 4.1 per cent over the next five years. Emerging economies, particularly in the Middle East and Africa, will be the fastest-growing markets.

“Air cargo remains as vital to the global economic system as ever. This year, more than $6.8 trillion worth of goods, equivalent to 35 per cent of total world trade by value, will be transported around the world by air. So it is welcome to see a forecast for a return to growth for the air cargo sector after several years in the doldrums. An average of more than 4 per cent growth for the next five years would be a marked improvement on the performance of recent years. Since 2011, for example, growth in freight tonnes has averaged just 0.63 per cent per year," said Tony Tyler, Iata’s Director General and CEO.

"Nevertheless, despite the positive picture, the overall risks to the economic outlook, and therefore to air freight, remain towards the downside. Trade protectionism is a constant danger. According to the World Trade Organization (WTO), between November 2013 and May 2014 alone, 112 new trade-restrictive measures were enacted by G20 governments. Geopolitical concerns, volatility of oil prices, and competition from rail and sea could also affect this forecast. The air cargo industry certainly cannot afford to be complacent," said Tyler.

To enhance air cargo competitiveness, the industry is aiming to cut average transit times by up to 48 hours by 2020. To achieve this, air freight is modernizing its processes, improving quality and reliability, and widening the range of services offered. A key component of modernized processes is the e-Freight project, which will render air cargo shipments paperless. As a first step, the industry is adopting the e-Air Waybill (e-AWB). In September 2014 global e-AWB penetration reached 19.4 per cent, meaning the 2014 industry target of 22 per cent is within reach.

(Home page image courtesy Shutterstock)