Weak demand for air cargo expected to continue in 2016

The International Air Transport Association (IATA) has reported that it expects stagnant growth for air cargo to continue into 2016.

The IATA factors into its dismal outlook the slowdown in China, falling commodity prices, and a potential increase in U.S. interest rates. It reports that the average air freight load factor is at a six-year low, in part because of the influx of passenger planes, which has led to overcapacity.

The slight growth observed in air cargo this year has been attributed to one-time factors such as international car recalls and backlogs at U.S. West Coast sea ports from last year.

However, the average cost of shipping has remained stable, with a global drop in oil prices lowering fuel costs.

(Source: Wall Street Journal)