Transitional Simplified Procedures

HM Revenue and Customs (HMRC) has written to 145,000 VAT-registered businesses trading with the EU about simplified importing procedures and also updated them on the actions that they need to take to prepare.

Transitional Simplified Procedures (TSP) for customs will make importing easier for an initial period of one year, should we leave the EU without a deal, to allow businesses time to prepare for usual import processes.

Once businesses are registered for TSP, they will be able to transport goods from the EU into the UK without having to make a full customs declaration at the border, and will be able to postpone paying any import duties.

Treasury Minister, Mel Stride MP, the Financial Secretary to the Treasury, said:

Leaving the EU with a deal remains the government’s top priority. This has not changed. However, a responsible government must plan for every eventuality, including a no deal scenario. Businesses and citizens should ensure they are similarly prepared for leaving the EU.

HMRC is helping businesses get prepared and, amongst other significant communications, has written 3 times to affected businesses, each time stepping up the advice and encouraging them to take action.

This latest letter, and new GOV.UK guidance, announces Transitional Simplified Procedures for EU trade which will ease the transition, especially for businesses new to the rules associated with importing.

The new procedures reduce the amount of information importers need to give in an import declaration when the goods are crossing the border. They do this by allowing importers to defer:

  • giving a full declaration until after the goods have crossed the border
  • paying any duty until the month after import

If tariffs apply to the goods that they import, and they want to use transitional simplified procedures, they will need to defer paying any import duties by setting up a direct debit.

HMRC is also reminding businesses to get an Economic Operator Registration and Identification (EORI) number if they do not already have one. This number is crucial to be able to trade after we leave the EU (if we leave without a deal). It’s free and takes just 10 minutes to register online.

TSP will remain in place for more than a year to give businesses time to prepare to use the full customs processes that already apply to imports from non-EU countries.

The policy will be reviewed within 3 to 6 months after it’s introduced on 29 March 2019 to see how it’s working.

HMRC will consult with businesses and give them at least a 12-month notice period before withdrawing the easements in TSP and applying the usual customs processes to imports from the EU. This will give businesses enough time to prepare.

Businesses can register for TSP from 7 February 2019.

Businesses can register for TSP if they:

  • have an EORI number
  • are established in the UK
  • are importing goods from the EU into the UK

Read the full guidance on registering for simplified import procedures if the UK leaves the EU without a deal.

You can see the letter sent to 145,000 VAT registered businesses that trade with the EU, and previous letters on GOV.UK.

 

low tariffs after brexit

HMRC outlines phased approach for Entry Summary Declarations

The government has announced plans to phase in for EU imports the pre-arrival forms known as Entry Summary Declarations, if the UK leaves the EU without a deal.

Officials on Monday held a series of meetings with organisations who represent the haulage industry and handle a significant portion of the UK’s cross border trade, to confirm that from 29 March, the status quo will be temporarily maintained as they will not need to submit Entry Summary Declarations on imports for a period of six months.

Currently Entry Summary Declarations are not required when importing goods from the EU. They will continue to apply for trade from the rest of the world.

The measure is designed to give business more time to prepare for changes to EU-UK trade arrangements in the event that the UK leaves without a deal. This builds on the plans that Transitional Simplified Procedures (TSP) can be used for at least 15 months for customs declarations.

Financial Secretary to the Treasury Mel Stride MP said:

We’ve listened to businesses and are responding to their concerns.

We have been adamant that in the event of no deal, trade must continue at our borders, and we will continue to make our borders secure.

Maintaining continuity with the current system for the first six months and phasing Entry Summary Declarations in will ensure we deliver on that promise.

The new rules only apply to goods coming from the EU, and will maintain the status quo for carriers. Importers will still be required to submit import declarations for customs purposes – which are not the same as Entry Summary Declarations. HMRC announced ways of making these import declarations easier, through Transitional Simplified Procedures on 4 February 2019.

After the six-month transitional period, carriers will be legally responsible for ensuring Entry Summary Declarations are submitted pre-arrival to HMRC at the time specified by mode of transport.

The measure will not change the UK’s commitment to ensuring our borders remain secure in the event of a no deal and Border Force will continue to carry out intelligence-led checks. A Readiness Task Force in preparation for EU Exit is being recruited and Border Force is on track to increase staff headcount by 900 at the end of March 2019.

The UK’s approach to dangerous goods coming into the UK is not affected.

Pauline Bastidon, FTA’s Head of Global & European Policy, said:

“Today’s HMRC announcement on the temporary waiver of security and safety declarations for post-Brexit logistics movements is a great response to FTA’s campaigning over the past two years, and a positive step towards minimising disruptions on trade between the UK and EU and integrated supply chains after Brexit. However, it is imperative that the UK government maintains pressure on the EU to ensure that a similar waiver is adopted by the EU. To ensure that Britain can keep trading efficiently, it is vital that the European Commission and UK agree a longer term, more sustainable arrangement to remain in the same security zone, which would make safety and security declarations for UK-EU trade irrelevant.  Above all, it is vital that the UK’s supply chain remains as frictionless as possible – British business needs to be confident that goods and materials will continue to transit the nation’s borders as swiftly and efficiently as possible.

Sources: www.gov.uk / fta.co.uk

air freight

Air Freight Demand Ends Year Up 3.5%

The International Air Transport Association (IATA) released full-year 2018 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs) grew by 3.5% compared to 2017.

This was significantly lower than the extraordinary 9.7% growth recorded in 2017. 

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 5.4% in 2018, outpacing annual growth in demand. This exerted downward pressure on the load factor but yields proved resilient.

Air cargo’s performance in 2018 was sealed by a softening in demand in December. Year-on-year, December demand decreased by 0.5%. This was the worst performance since March 2016. Freight capacity, however, grew by 3.8%. This was the tenth month in a row that year-on-year capacity growth outstripped demand growth.

International e-commerce grew in 2018 which was a positive factor for the year. Yet, there was a softening of several key demand drivers:

  • The restocking cycle, during which businesses rapidly built up inventories to meet demand, ended in early 2018;
  • Global economic activity weakened;
  • The export order books of all major exporting nations, with the exception of the US, contracted in the second half of 2018;
  • Consumer confidence weakened compared to very high levels at the beginning of 2018.

“Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds. Still, demand grew by 3.5% compared to 2017. We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. But with the persistence of trade tensions and protectionist actions by some governments there is significant downside risk. Keeping borders open to people and to trade is critical,” said Alexandre de Juniac, IATA’s Director General and CEO.

“To attract demand in new market segments, the air cargo industry must improve its value proposition. Enabling modern processes with digitalization will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables,” said de Juniac.

DECEMBER 2018 (% YEAR-ON-YEAR) WORLD SHARE1 FTK ASTK FLF (%-PT)​2 FLF (LEVEL)​3
Total Market 100.0% -0.5% 3.8% -2.1​% 48.8%
Africa 1.7% -2.2% 4.9% ​-2.8% 38.1%
Asia Pacific 35.4% -4.5% 2.6% ​4.1% ​54.0%
Europe 23.3​% 1.9% 3.7% ​-1.0% 56.7%
Latin America 2.6% ​-0.1% 6.0% ​-1.8% ​29.1%
Middle East ​​13.3% 0.1% 4.5% ​-2.1% ​48.8%
North America 23.7% 2.9% 4.5% ​-0.6% 41.4%

Regional Performance

Airlines in all regions with the exception of Africa reported an annual increase in demand in 2018.

Asia-Pacific carriers posted the weakest growth of any region in December 2018 with a decrease in demand of 4.5% compared to the same period a year earlier. Capacity increased by 2.6%. The weaker performance in December contributed to growth in freight demand of only 1.7% in 2018 compared to 2017. Annual capacity increased 5.0%. The weaker performance of Asia-Pacific carriers in 2018 largely reflects a slowing in demand for exports from the region’s major exporters (China, Japan and Korea). Signs of a moderation in economic activity in China and an escalation of trade tensions continue to pose a downside risk to air cargo in Asia-Pacific.

North American airlines posted the fastest growth of any region for the seventh consecutive month in December 2018 with an increase in demand of 2.9% compared to the same period a year earlier. Capacity increased by 4.5%. This contributed to an annual growth in demand in 2018 of 6.8%, matching the rate of capacity increase. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.

European airlines posted a 1.9% year-on-year increase in freight demand in December 2018 and a capacity rise of 3.7%. The improved performance in December contributed to an annual growth in demand for air cargo of 3.2% in 2018. Capacity increased by 4.3% in the same year. Weaker manufacturing conditions for exporters, particularly in Germany, one of Europe’s key export markets, along with mixed economic indicators impacted demand in 2018.

Middle Eastern carriers’ freight volumes increased 0.1% year-on-year in December and capacity increased 4.5%. This contributed to an annual increase in demand of 3.9% in 2018 – the third fastest growth rate of all the regions. Annual capacity increased 6.2%. The region continues to be affected by geopolitical issues.

Latin American airlines experienced a decrease in year-on-year demand of 0.1% in December after three months of positive growth. Capacity increased by 6.0%. Despite a decrease in demand, it’s worth noting that the within South America market continues to perform strongly, with international demand up almost 20% year-on-year. Annual growth in freight demand among Latin America carriers in 2018 increased by 5.8% – the second fastest of all regions. Annual capacity increased 3.4% in 2018.

African carriers’ saw freight demand decrease by 2.2%, in December 2018, compared to the same month in 2017. This was significantly less than the 9.4% decrease the previous month. Capacity increased by 4.9% year-on-year. It’s worth noting that seasonally-adjusted international freight volumes, despite being 7.7% lower than their peak in mid-2017, are still 50% higher than their most recent trough in late-2015. Annual growth in freight demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.

Source: IATA.org
heathrow

Christmas drone chaos shows an over reliance on southern airports and shaky infrastructure

The chaos at Gatwick last month emphasised the UK air freight sector’s over-reliance on the south-east region.

When Heathrow and Gatwick are working at full tilt – which is almost all the time – they can claim to be the most efficient airports in the world.

Between 19 and 21 December, thousands of flights were grounded and cancelled after drone sightings sparked safety concerns at Gatwick.

Although few cargo flights were affected then, the sighting at Heathrow caused major industry concern.

Last month, the government launched a 16-week consultation on its aviation strategy, outlined in the publication of Aviation 2050: The Future of UK Aviation.

Throughout the document, the government refers to supporting continued growth of the air freight sector by making best use of existing capacity at airports.

Head of cargo at Manchester Airport Group (MAG) Conan Busby, speaking to The Loadstar said “MAG has the third- and fourth-largest airports and the UK’s largest dedicated cargo aircraft operation, at East Midlands (EMA). All are perfectly positioned to continue to facilitate global trade for UK businesses and consumers.”

Mr Busby added there was “significant” transformation under way at EMA with its cargo operation, DHL having doubled its capacity while UPS is building its new UK air hub there.

“Also, beyond our boundary there is the East Midlands Gateway Rail Freight development under construction, which will further support UK logistics.”

Mr Busby said MAG was “not interested in a speculative approach to growth”, but some in the forwarding community believe this may be the best way forward.

Namely, if regional airports were serious about challenging Heathrow, they would “need to be less risk averse and use any options to attract more carriers providing cargo services”.

However, Mr Busby expected EMA to lead MAG’s cargo growth in the years to come, with both Manchester and Stansted in support. He added the group would be “pushing” to make best use of the runway capacity at both airports.

He added: “All three airports will play a key role in facilitating UK global trade especially as attention turns to understanding what trade deals might look like post-Brexit.”

Both airports are now reported to be investing in anti drone technology and have invested several million pounds in providing ourselves with the equipment and the technology that the armed forces deployed over Christmas,”

Source: The Loadstar / Independent.co.uk / Fin24.com

one belt one road

Traffic rising on the Silk Road

Rail freight traffic from Europe to Chongqing in China exceeded traffic in westbound direction in 2018. The number of trains travelling from Europe to the southwestern Chinese city reached 728, out of a total of 1,442 freight trains in both directions. This is the first time that eastbound traffic was more than westbound movement.

Westbound traffic between China and Europe has traditionally accounted for the majority of the volumes on the New Silk Road. The return of empty containers to China has been a dilemma for operators, as it is a costly procedure, pressing the optimal use of Chinese funding tools. Creating a balance between east- and westbound traffic has been one of the main aims of operators active on the New Silk Road.

117 per cent growth

The number of trains traveling back to Chongqing surpassed the number of outbound trains for the first time in 2018, said Yuxinou (Chongqing) Logistics Co in a Xinhua report. In general, traffic between the Chinese city and Europe witnessed a surge last year: the volumes increased by 117 per cent, according to the Chinese media source.

Although recent figures have not yet been announced by other provinces, the imbalance between east- and westbound traffic is witnessed in many other Chinese provinces. For example, trains between Tilrburg in the Netherlands and Chengdu in China accounted for 235 in 2017, of which 102 trains were in the eastward direction.  Only half were fully loaded, explained Jialu Zhang, representing CIPI in Tilburg.

Imbalance

“The imbalanced volumes of import to and export from China has created challenges for the further development of the round-trip rail services. Therefore, promoting and stimulating the export trade from the Netherlands to China by rail has become one of the essential task for both GVT and its Chinese partner”, Zhang explained earlier.

Following an equal trend in deep sea freight transport, eastbound traffic requires more incentive and thus, market prices along this route are lower than in the other direction. While eastbound freight rates are subsidised by about fifty per cent, in the direction of Europe this accounts for 25 per cent,” explained the Group of European TransEurasia Operators and Forwarders (GETO) in earlier comments.

End of subsidies

Once the balance of export and import is there, train services should be able to operate without subisidies, is the general understanding. Although not confirmed, many have suggested that the Chinese subsidies will be phased out starting from 2020. “Most railway managers and operators are likely to push the downward trend of actual costs, an indispensable trend to safeguard the train offers for the long term in especially the eastern direction”, GETO explained.

Moreover, an increase in eastbound traffic serves the rail freight industry in that rolling stock is used more efficiently. As almost twice as many trains depart in western direction, rolling stock often gets stuck in Europe, resulting in storage costs or the return of empty equipment by rail. “In rail freight, the return of empties can cost approximately fifty per cent of the rate.With increasing volumes in eastern direction, the situation is improving. The increase in eastbound traffic supports the return of locomotives, rolling stock as well as container equipment and thus, the cost of rail freight is decreasing by each percentage we increase eastbound traffic,” noted GETO.

Chongqing as a pioneer

Chongqing was the point of departure of the first train connection on the New Silk Road. In April 2015, the first regular cargo train departed from the southwestern city in the direction of Duisburg, Germany. It did so crossing the Chongqing-Xinjiang-Europe international line, which was established in 2011. What used to be a weekly service, had now become a service running three times a week. Since the start of this service, the number of trains going back and forth have quadrupled.

Currently, trains originating from Chongqing reach over thirty European countries, and the goods brought back are transferred to other Chinese cities and destinations in Southeast Asia. In November last year, the first train on the new railway link between Mannheim and Chongqing arrived. Chongqing was also connected to the UK with a new service from C.H. Robinson, linking eight cities in China and eight cities in Europe, with the most western destination being Barking in the UK.

New routes

New and extended connections to and from Chongqing are also planned for 2019. This month, a new connection from Chongqing to Minsk, Belarus has commenced. The first train departed on 4 January and will also stop in the Russian city of Vorsino. It runs three times a week in one direction. The block train from Chongqing to the Polish border city of Malaszewicze will run every day, and to the Polish capital of Warsaw every Sunday, according to Smile Logistics.

Source: Railfreight.com

MOL Triumph

2019 supply and demand balanced by less mega container ships

A “reduced appetite” for ordering ultra-large container vessels (ULCVs) and carriers instead aspiring to become global logistics integrators could finally balance container capacity supply with demand, according to new analysis from Drewry.

Indeed, at the end of last year Maersk’s chief executive, Soren Skou, told The Financial Times: “We for sure have to do some acquisitions in the logistics space, primarily to gain capability and scale.”

Currently, Maersk Line has just three ships on order and appears unconcerned that 2M partner and rival MSC is narrowing the capacity gap and South Korean HMM has returned to the shipyards in a big way.

“Aside from feeder ship replenishment, there has been no reaction from other lines to HMM’s mega-ship order and as such we have greatly reduced our projected orders for 2020 onwards,” said Simon Heaney, senior manager, container research at Drewry and editor of the Container Forecaster.

In September, HMM placed an $2.6bn order with South Korean yards – underwritten by funds from the state-owned Korea Ocean Business Corporation – for 12 23,000 teu and eight 15,000 teu ships for delivery from the first quarter of 2020.

Weaker global macro-economic drivers have contributed to a downgrade in Drewry’s port throughput forecast for this year to growth of approximately 4%, but it said the “softening trend should be mitigated by changes made on the supply side to better balance the market”.

It said that since its last forecast, the delivery of several newbuilds has been pushed back to 2020 and, with an expected increase in scrapping this year, the net addition to the container fleet this year is expected to be less than half that of 2018, at just 2.5%.

According to Alphaliner the global cellular fleet as at 31 December 2018 stood at 5,284 ships for 22.3m teu, representing a year-on-year growth of 5.7%, which included 165 delivered during the year, equating to 1.3m teu, while only 66 vessels, 111,000 teu, were scrapped.

Most analysts are predicting demolition levels this year will increase, back to levels seen in recent years, as older, high fuel-consuming vessels are taken out of service ahead of the IMO’s 1 January 2020 low-sulphur regulations.

Drewry also expects capacity curbs associated with IMO 2020, as ships are temporarily taken out of service for the retro-fitting of scrubbers that will enable the vessels to continue to bunker with less-expensive heavy fuel oil.

Moreover, it said that wider use of slow-steaming to lessen the impact of higher fuel costs would also help absorb new supply.

“This subsequently feeds into a much brighter supply-demand index forecast for carriers through 2022,” said Drewry, adding that, notwithstanding the slowing demand growth, the change in supply dynamics would contribute to “better freight rates and profits” for the container lines.

“Last year was one of the most unpredictable container shipping industry has faced,” said Mr Heaney, adding that he expected this year to be “similarly volatile” due to uncertainties associated with the US-China trade war and the new fuel regulations.

However, in an upbeat conclusion to its review, Drewry is predicting “another solid year for the market”.

And so far the evidence is that carriers are taking no chances that excess capacity will promote a new damaging “race to the bottom” for freight rates, by blanking a number of voyages on their east-west networks in the softer demand weeks around the Chinese new year holiday.

Source: The Loadstar

2019

What can the container port industry look to expect in 2019?

As we welcome in 2019, Drewry have shared their thoughts on the key issues and trends likely to affect the container ports and terminals sector in the year ahead.

Demand: We will see a softening of the global container port demand growth rate, down from an estimated 4.7% in 2018 to just over 4% in 2019 (although 4% is still very respectable and adds over 30 million teu to the world total). However, the projection for 2019 is highly uncertain due to the US-China tariff wars, Brexit etc. So there is a big caveat.

Capacity: We can expect to see continued caution by investors and operators in terms of investment in new capacity because returns are not what they used to be. Even Chinese players may be affected if China’s economy slows markedly (see above). Greenfield expansion projects will be the area hardest hit. Nevertheless, a global capacity addition of over 25 million teu can be expected in 2019, representing a spend of ~US$ 7.5 billion

Ships: The good news for the industry is that there will be no significant increase in maximum container ship size (maximum teu intake is going up but physical dimensions are not). However, cascading will still be very much at work across all trade routes, and each port will see increasing pressure on whichever berths are able to handle the biggest ships (and increased obsolescence of older berths).

IT: The opportunities offered by digitisation/automation/blockchain/smart ports/IoT/hyperloop (the list goes on) will continue to be vigorously explored by both terminal operators and port authorities. However, the big challenge remains: how to find the way through the minefield of options to focus on what will really work and what has the best potential.

Supply chain: Linked closely to the above, terminal operators and port authorities will continue to seek to expand their activities beyond the port gate into the wider supply chain, to try and diversify sources of revenue, tie in traffic and get closer to cargo owners. But it’s a crowded field, with the heavyweight liner shipping companies aiming to do the same thing. Remains to be seen if anyone can succeed at it.

Profit: Despite all the above challenges, the global container terminal industry will remain a very solid, profitable business. The 2019 industry throughput of over 800 million teu should generate EBITDA in excess of US$25 billion.

Source: Drewry.co.uk

future of shipping

New bunker adjustment fees keep spot rates firm

Asia-Europe ocean carriers from have announced further hikes in their FAK rates this month after successfully pushing through 1 January spot rate increases.

Alphaliner said rates on the route “remained firm in December, despite the resumption of the 2M’s AE2/Swan service”.

Hapag-Lloyd said that on 16 January, “due to strong demand”, it was increasing its FAK rates  from Asia to North Europe and the west Mediterranean to $2,200 per 40ft.

Maersk Line has increased its FAK rates to $2,300 per 40ft and CMA CGM has will raise its FAK rate by $200 to $2,400 per 40ft from 15 January.

This follows a surge in spot rates in the final week of last year, which saw the North Europe component of the Shanghai Containerized Freight Index (SCFI) leap 14.2% to $996 per teu, with spot rates for Mediterranean ports jumping 15.3% to $967 per teu.

There was no further increase for North Europe in today’s SCFI, although the Mediterranean saw a further increase of 3.1% to $997 per teu.

Moreover, since 1 January, carriers are implementing new bunker surcharge formulae, based on October/November fuel prices, which were a third higher than they are currently, at around $320 per tonne. So shippers should see the fuel surcharge element of their rates reduce in the coming months in line with the decline in bunker costs.

Elsewhere, the bear run on transpacific spot rates, which has seen prices tumble 32% and 24% respectively for Asia to the US west and east coasts since early November, was halted in the final week of 2018. In week 52, the SCFI recorded a 6.8% increase in spot rates for the west coast , to $1,883 per 40ft, and for east coast ports there was a jump of 9%, to $2,998 per 40ft.

The momentum continued this week, with the SCFI recording a 2.7% uplift for rates to the west coast to $1,933and to the US east coast by 4% to $3,119.

Phase 2 of the implementation of 25% tariffs on the import of over 5,700 Chinese goods is currently set for 2 March.

Source: The Loadstar

maersk

Sea Machines gains financial support to develop autonomous containerships

The prospect of unmanned container vessels serving global container supply chains has taken another step forward.

Sea Machines Robotics, a US developer of autonomous vessels, announced it had raised $10m from venture capital funds.

The investors were led by Accomplice VC and Eniac Ventures, but also include Toyota AI Ventures, TechNexus Venture Collaborative, NextGen VP, Geekdom Fund, Launch Capital and LDV Capital, and brings Sea Machines’ external funding up to $12.5m.

Boston-headquartered Sea Machines, which in April signed up Maersk Line to pilot its “perception and situational awareness technology aboard one of the company’s new-build Winter Palace ice-class containerships”, said it would use the new funds to grow its R&D and engineering teams as well as expand its sales efforts globally.

“We are creating the technology that propels the future of the marine industries and this investment enables us to double down on our commitment to building advanced command and control products that make the industry more capable, productive and profitable,” said Michael Gordon Johnson, founder and chief executive.

Jim Adler, founding managing director of Toyota AI Ventures, added: “We believe autonomous mobility can help improve people’s lives and create new capabilities – whether on land, in the air or at sea.

“Sea Machines’ autonomous technology and advanced perception systems can reduce costs, improve efficiency and enhance safety in the multi-billion dollar commercial shipping industry. This marks our first investment in the maritime industry, and we’re excited to embark on this journey.”

Vic Singh, founding general partner at Eniac Ventures, added: “The level of traction Sea Machines has from the global maritime industry is a tell-tale sign that the industry is the next frontier for autonomy.”

And Michael Rodey, senior manager at AP Møller-Maersk, said: “I think this investment sends a strong signal on the types of technologies that will come to define the maritime industry in the future.”

Source: The Loadstar

air freight

Happy new year as air freight marks a decade ‘in the black’

IATA claims global aviation is on course for a “decade in the black”.

However, the annual pace of growth in cargo is well below last year’s “exceptional” performance.

Despite the slowdown, the association remains relatively positive about future growth, albeit it at a slower pace.

“The expected 3.7% annual increase in cargo tonnage next year to 65.9m tonnes (up from 63.7m in 2018) would be the slowest pace since 2016,” it said.

“This reflects a weak world trade environment impacted by increasing protectionism. Cargo yields are expected to grow by 2%.”

Pointing to lower oil prices, alongside “solid, albeit slower” economic growth as drivers of profitability, it said next year would be the 10thconsecutive year of profit.

Not only that, but 2019 would also mark the fifth consecutive year in which airlines had delivered a return on investment, with IATA chief executive Alexandre de Juniac sounding “cautiously” optimistic.

“We had expected that rising costs would weaken profitability in 2019, but the sharp fall in oil prices and solid GDP growth projections have provided a buffer,” he said.

“So we are cautiously optimistic the run of solid value creation for investors will continue for at least another year; but there are downside risks as economic and political environments remain volatile.”

Regionally, North America is entering 2019 on the front foot, reporting the fastest rate of growth globally, with demand up 6.6% year on year for October.

And while all regions reported growth in October, Latin America only just got in on the positivity with a mere 0.3% upturn in demand.

“Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018 – slow but steady growth continues despite trade tensions,” added Mr de Juniac.

“The growth of e-commerce is more than making up for sluggishness in more traditional markets, and yields are strengthening in the traditionally busy fourth quarter.

“We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note.”

Source: The Loadstar