By Emmie V. Abadilla Global air freight demand, measured in freight tonne kilometers (FTKs), contracted by 3.2 percent this July versus the same period last year as global trade weakened and the trade dispute between the US and China intensified, according to latest figures from the International Air Transport Association (IATA). July also marked the ninth consecutive month of year-on-year decline in freight volumes. Global trade volumes are 1.4 percent lower than a year ago and trade volumes between the US and China have fallen by 14 percent year-to-date. The global Purchasing Managers Index (PMI) did not indicate an uptick, either. Its tracking of new manufacturing export orders showed falling orders since September 2018. And for the first time since February 2009 all major trading nations reported falling orders. Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.6 percent year-on-year in July 2019. Capacity growth now outstripped demand growth for the ninth consecutive month. “Trade tensions are weighing heavily on the entire air cargo industry," acknowledged Alexandre de Juniac, IATA's Director General and CEO. "Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes. While current tensions might yield short-term political gains, they could lead to long-term negative changes for consumers and the global economy. Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences,” he explained. Airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in July 2019, while North America and Europe experienced more moderate declines. Africa and Latin America both recorded growth in air freight demand compared to July last year. Asia-Pacific airlines saw demand for air freight contract by 4.9 percent in the seventh month of 2019. The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market. With the region accounting for more than 35 percent of total FTKs, this performance is the major contributor to the weak industry-wide outcome. Air freight capacity increased by 2.5 percent over the past year. Middle Eastern airlines’ freight volumes decreased 5.5 percent in July 2019 compared to the year-ago period. This was the sharpest drop in freight demand of any region. Capacity increased by 0.2 percent. Escalating trade tensions, the slowing in global trade and airline restructuring have impacted the recent performance. North American airlines saw demand decrease by 2.1 percent in July 2019, compared to the same period a year earlier. Capacity increased by 1.6 percent over the past year. Despite a sound economic backdrop supporting consumer spending, the US-China trade tensions continue to weigh on the region’s carriers. Freight demand between Asia and North America have fallen by almost five percent in year-on-year terms. Latin American airlines experienced an increase in freight demand growth in July 2019 of three percent compared to the same period last year and capacity increased by 2.7 percent. The recovery of the Brazilian economy, to avoid a recession, was a positive development; however, concerns regarding the outlook for some key Latin American countries including Argentina remain. European airlines posted a two percent decrease in freight demand in July 2019 compared to the same period a year earlier. Weaker manufacturing conditions for exporters in Germany, heightened recession fears, and ongoing uncertainty over Brexit, have impacted the recent performance. Capacity increased by 4.2 percent year-on-year. African carriers posted the fastest growth of any region in July 2019, with an increase in demand of 10.9 percent compared to the same period a year earlier. This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the sixth consecutive month. Capacity grew 17 percent year-on-year. Strong trade and investment linkages with Asia have underpinned a double-digit increase in air freight volumes between the two regions over the past year.