Amidst global stagnation fears, Air Freight Soars
Global economic anxiety further heightened last week, with the IMF warning that a decade-long economic lull could creep up on the world without active efforts to stimulate growth. This is despite residual promise in the US and 30 emerging markets, whose resilience could be undone by declines elsewhere. China’s claims of a return to growth have been met with skepticism, even as the Asian Development Bank maintains a positive view of the bloc’s growth prospects. Europe, having acknowledged its economic challenges seeks options for growth, with former leaders suggesting a path through a commitment to a functional single market.
With the conflict in the Middle East reaching a fever pitch over the weekend, concerns remain about the short-term prospects of ocean freight. Benefitting from the long-standing uncertainty, air cargo volumes recorded an 11.9% YoY growth in February. As summer passenger traffic picks up pace, hope remains for a moderation in air freight rates. In the silver linings, technology remains on the charge, with advancements, such as AI and automation in freight brokerage, along with innovations like battery-powered electric wagons, offering long-term promise of efficiency improvements and potentially lower costs.
?In the short term, we remain watchful of trends as Q2 continues to take shape.
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Weekly Highlights
Global economy faces decade of weak growth, warns IMF chief
EU faces decline without market reform, report warns?
ADB forecasts developing Asia’s economy to grow 4.9 per cent in 2024
African airlines see 22% air cargo demand growth in 3rd month of global rise
Baltimore bridge collapse has not led to an increase in ocean freight container shipping rates
Iran’s IRGC seizes ‘Israeli-linked’ ship near Strait of Hormuz
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Economic News?
“The problem is that in this new world, we are too small. And if we don’t integrate, we will decline. Inertia on the single market means decline... The US is exploiting its single market. And we are not.”
Enrico Letta, the former Italian Prime Minister
Global economy faces decade of weak growth, warns IMF chief
The primary driver of weaker growth was a significant and broad-based slowdown in productivity, she said, urging countries to enact measures to... Read more
‘Robust' US has helped improve global economic outlook, IMF chief says
Strong growth in the United States has helped to lift the outlook for the world economy, but more needs to be done to stem a slide in productivity, the head of the IMF said Thursday... Read more
As US inflation ticks back up, it could impact the presidential election
Wednesday’s “disappointing” inflation data in the United States showed a jump from February, dampening expectations of an interest rate cut and raising concerns that inflation could remain stubbornly high… Read more
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European companies cut jobs as economy sputters
The highest inflation for decades and the impact of the war in Ukraine have forced companies across Europe into layoffs or hiring freezes... Read more
EU faces decline without market reform, report warns?
The EU must integrate its financial, energy and telecommunications markets or face losing its “economic security” and falling further behind the US and China, the author of a new report has warned.... Read more
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China says economy ‘stable,’ rejects Fitch Ratings downgrade of its fiscal outlook
China’s Finance Ministry denounced a report by Fitch Ratings that kept its sovereign debt rated at A+ but downgraded its outlook to negative, saying Wednesday that China’s deficit is at a moderate and reasonable level and risks are under control... Read more
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China's Q1 GDP growth likely to slow, more stimulus on the cards
China's economy is expected to have slowed in the first quarter as a protracted property downturn and weak private-sector confidence weigh on demand, maintaining pressures on policymakers to unveil more stimulus measures... Read more?
ADB forecasts developing Asia’s economy to grow 4.9 per cent in 2024
Developing economies in Asia and the Pacific are forecast to expand by 4.9 per cent on average this year as the region continues its resilient growth amid robust domestic demand, improving semiconductor exports, and recovering tourism... Read more
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UK Economy Grows for a Second Month as Recovery Takes Hold
The UK economy grew for a second month in February, adding to evidence that the shallow technical recession at the end of last year is already over and that a recovery is underway... Read more
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Emerging Markets Are Exercising Greater Global Sway
Over the past two decades, these economies have become much more integrated with global markets and are generating larger economic “spillovers” to the rest of the world... Read more
“Global growth is marginally stronger on account of robust activity in the United States and in many emerging markets economies. It is tempting to breathe a sigh of relief. We have avoided a global recession and a period of stagflation — as some had predicted."
International Monetary Fund Managing Director Kristalina Georgieva
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Industry News
"February’s demand growth of 11.9% far outpaced the 0.9% expansion in cross-border trade. This strong start for 2024 could see demand surpass the exceptionally high levels of early 2022. It also shows air cargo’s strong resilience in the face of continuing political and economic uncertainties."
Willie Walsh, Iata’s director general
Soaring air freight rates may level out as summer capacity takes off
WorldACD reported that the average global air freight rates rose week on week by more than 2% between 1-7 April, and now sit at $2.54 per kg – 41% above April 2019 pre-Covid levels... Read more
Freight train service between China and Europe keeps double digit growth
The freight train service between China and Europe has kept around a double digit year-on-year growth in the first quarter of this year, facilitating the stable and smooth operation of the international supply chain and promoting connectivity between China and Europe... Read more
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Iran’s IRGC seizes ‘Israeli-linked’ ship near Strait of Hormuz
Iranian armed forces have seized a container ship near the Strait of Hormuz amid rising tensions across the region after a deadly Israeli attack on Iran’s consulate in Syria.... Read more
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African airlines see 22% air cargo demand growth in 3rd month of global rise
Total demand, measured in cargo tonne-kilometers (CTKs), rose by 11.9% compared to February 2023 levels (12.4% for international operations), marking the third consecutive month of double-digit year-on-year demand growth... Read more
Cargo Volumes continue to grow at Liege Airport
Over the month of March 2024, the number of cargo aircraft movements rose by 8% compared with the same period in 2023. Freight traffic rose by 16% (104,080 tons vs. 90,097 tons) in March 2024, and by more than 14% year-to-date in 2024... Read more
Baltimore bridge collapse has not led to an increase in ocean freight container shipping rates
The collapse of the Francis Scott Key Bridge in Baltimore has not led to an increase in ocean freight container shipping rates, according to data from Xeneta. Since the incident on 26 March, average spot rates from the Far East to the US North East Coast, including Baltimore, have seen a slight decrease of 1% to US$5,421 per FEU... Read more
FBI opens criminal investigation into Baltimore bridge collapse, AP source says
The FBI is conducting a criminal investigation into the deadly collapse of Baltimore’s Francis Scott Key Bridge that is focused on the circumstances leading up to it and whether all federal laws were followed, according to a person familiar with the matter... Read more
" These shippers probably have five years worth of work in front of them to fortify, make visible and digitize their supply chains. I think about that opportunity that is in front of us and helping shippers answer the question: Who do I align with in the future knowing that supply chain is a critical component of our company’s business?"
Dan Annunziata, Uber Freight’s head of Commercial
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Ranon Quote of the Week
" Monetary policy is an inexact science and takes time to take effect. But it’s a psychological effect – that first cut, it comes with the message that we’ve won the battle against inflation. It complicates things so close to the elections."
Fed Chairman Jerome Powell
Technology, Policy and Sustainability Updates?
Tai Software and Front Partnering to Revolutionize Freight Broker Operations with AI and Email Automation
Through this partnership, brokerage agents are now empowered to focus on growth-oriented activities such as optimizing lane bookings and heightening service capacity, ultimately resulting in increased revenue generation... Read more
Intramotev has launched the first battery-electric wagon in a freight train
The American railway startup, Intramotev, has utilized self-propelled battery-electric wagon technology for the first time in a traditional freight train, employing ReVolt technology at a mine in Pennsylvania... Read more