Falling air cargo demand could be flashing warning signs about the broader economy.
— is up 10% this year, compared with nearly 17% gain for the broader S&P 500. The DJTA, considered an economic bellwether, has dropped by about 5% in the last month, compared with an almost 2% decline in the broader market.
"With the -5.9% drop in July, following the -5.3% drop in June, and the -6.0% drop in May, we repeat our message from last two months: the shipments index has gone from "warning of a potential slowdown" to "signaling an economic contraction," strategist Donald Broughton wrote in the report for Cass Information Systems, a freight payments processor.
Air cargo globally is sagging amid the increased tariffs, eating into cargo airlines' profits. Air freight volumes measured in freight-ton kilometers, fell 3.6% in the first half of the year from the same period in 2018, the International Air Transport Association said earlier this month. International air cargo volumes from the Asia-Pacific region fell more than twice as much at 8.1%.
Spot shipping rates to ports along the U.S. West Coast were $1,368 for a 40-foot equivalent container, down more than 7% from the prior week and nearly 30% lower than a year ago, according to data from the Shanghai Containerized Freight Index provided by IHS Markit's Journal of Commerce.
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