This is coming mainly from the expansion of the passenger business as well as the increase in the freighter fleet. Dedicated freighters remain an essential part of air cargo as certain factors, such as the departure and arrival times, type and size of cargo, and difference between cargo and passenger destinations limit the use of belly cargo.
Air cargo yields continue to decline slowly, consistent with persisting weakness in load factors, keeping downward pressure on cargo business financial performance.
Mode mix optimization and modal shift from air to less-expensive or perceived more-environmental friendly maritime and rail transport has been occurring for some years. Freight forwarders offer more air/sea, air/road or air/rail products that combine to create price and total shipment time flexibility. The new railway and road-based ‘Silk Road’ network that connects China with Europe is capturing business from sea and air cargo.
Geopolitical concerns, volatility of oil prices, and recent economic trends to onshore or closer-to-home manufacturing are also affecting the demand for air cargo.
Trade protectionism has an increasingly damaging impact on world trade. According to the World Trade Organization (WTO), between May 2014 and October 2014 alone, 93 new trade-restrictive measures were instigated by G20 governments. The WTO estimates that
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since the onset of the global financial crisis in 2008, 1’244 restrictive measures has been implemented of which 962 remain in place. It is hoped that free trade agreement such as the WTO Bali Agreement will assist in reversing this trend.
In addition, the greater need for safety and security when shipping goods by air risks delaying shipping times, or results in the outright prohibition of transporting certain goods by air.