Volatile air freight rates making 2019 market difficult for forwarders to read
Forwarders are deploying wildly different strategies in an air cargo market that so far this ...
Project Selfie: measuring capacity utilisation in the air cargo industry needs an overhaul; the current standard poorly reflects how full planes really are
The results are in.
Nineteen airlines, representing nearly 25% of the global market; data on 166,000 widebody and freighter flights for the months of Apr-Jun 2017; 2.5m tons of air cargo; and many, many man hours.
It was a big ask. We initiated Project Selfie in a period when the peak, budget and holiday seasons all came together.
It’s no wonder that several airlines could not participate due to a lack of bandwidth. Many, however, did manage to share their flight data with us. So first of all, a big thank you to all the Selfie participants.
The goal of Selfie was to confirm or bust our belief that loadfactors based on weight provide a poor overall picture on how air cargo capacity is being utilised. And we succeeded.
We no longer believe that a global weight loadfactor is misleading. We know it is.
So how did we come to this conclusion?
Through the widebody and freighter flights data we received from participants, we quantified the difference in utilisation levels when applying a weight, volume or dynamic loadfactor (whichever of the first two is higher). The results speak for themselves.
The average volume loadfactor of 66% was 10 percentage points higher than the weight loadfactor of 56%. Applying the dynamic loadfactor metric put the utilisation rate even higher, at 71%.
On a global level then, we see a difference of 15 percentage points between the weight and dynamic loadfactor. Important to note is that this difference was not constant across all routes. In the regional analyses we conducted for the Selfie participants, we found the difference between these two metrics varying between 6% and 20%.
Can we apply the results from our sample of participants to the real world out there? We believe so. The number, size and diversity of the participating airlines make them representative of the total air cargo market.
The Project Selfie results confirm that the weight loadfactor is not an accurate metric to measure the capacity utilisation in our industry. It poorly reflects how full the planes really are. That in itself would not be an issue if it was regarded as such, but that is not the case. The weight loadfactor is still often regarded as the standard for reporting on capacity utilisation – overlooking the fact that the dynamic loadfactor, as our analysis shows, is far more reflective of the true utilisation of air cargo capacity.
And that needs to change. The large numbers of airlines that were willing to spend their scarce resources in support of this project proves that we are not alone in thinking this.
Project Selfie 2017 is drawing to a close. But it is not the end of this topic. We’ll take it further in 2018.
In the meantime, I wish you and your loved ones a happy holiday season and all the best in the new year.
Niall van de Wouw
Promotor of Project Selfie