The first eight months of 2015 have not been positive according to The Stifel Logistics Confidence Index. Fierce competition, volatility and overcapacity have all taken their toll and driven the Index to its lowest point since September 2013.
The Logistics Situation Index showed an easing in demand, although the fall was slighter, resulting in a decline of 1.8 points to a mark of 51.3.
International Transport Air Association CEO Tony Tyler noted that it had been “a disappointing first half of 2015, especially considering the strong finish to 2014.”
Airfreight
Airfreight volumes in June indicated a continuation of slowing tonnage growth. Weak global growth and declining trade activity saw volumes increase at a rate of just 1.2% for the month, a margin barely enough to repel claims of stagnation. As a result, the Logistics Situation Index for airfreight fell 4.1 points to 51.3, its lowest point of the year.
No individual lane saw an increase, but it was lanes out of Europe that performed most poorly to weigh on the Index. A fall of 7.2 points saw the Europe to Asia lane record a score of 48.4, while the Europe to U.S. lane lost 5.6 points and fell to 57.8 as a result. A loss of 2.4 points saw the U.S. to Europe lane fall back below the neutral 50 mark to 48.3, as the Asia to Europe lane showed a drop of 1.3 points to 50.6.
The Logistics Expectation Index for airfreight made for troubling reading for those hopeful of a repeat of last year’s strong finish as it shed 3.2 points to a mark of 57.3. The Asia to Europe lane led the decline with a fall of 4.5 points to 58.2, while the reverse Europe to Asia lane didn’t fare too much better as it recorded a decline of 3.7 points to a six-month low of 55.8.
The U..S to Europe lane lost 3.1 points as it hit 55.1 in August. Although the Europe to U.S. lane fell 1.2 points to 60.1 for the year, its lowest mark since October 2014, there is still perhaps some optimism to be found in its year-on-year performance which places it 7.7 points ahead of August 2014.
Sea Freight
A 0.5 point rise in the Logistics Situation Index for sea freight provided a positive note in August as three of the four lanes examined recorded growth. Leading the way was the Asia to Europe lane which rose 3.4 points to 56.4. There were similarly positive signs on the U..S to Europe lane which gained 3.0 points, but at 47.8 conditions undoubtedly remain challenging.
The Europe to Asia lane added 0.9 points to reach 51.0 and a second consecutive month above the neutral 50 mark. Weighing heavily on the present situation, however, was the Europe to U.S. lane which declined sharply, falling 5.4 points to 48.5 and indicating a contraction for the first time since March 2014. The strength of the U.S. dollar saw exports from North Europe to North America grow by 8.4% over the first five months of 2015, but significant capacity increases on the lane during that period are threatening to outstrip demand.
August’s familiar pattern of across the board declines returned in the Logistics Expectation Index for sea freight as 2.7 points were lost and a score of 56.4 recorded. Overcapacity on the Europe to U.S. lane appears to be a concern over the remaining months of 2015 as a fall of 3.4 points saw the index for the lane decline to 58.1.
Following a fall of 3.3 points, the Asia to Europe lane also saw a score of 58.1 recorded for August. The U.S. to Europe lane fell 3.0 points to 51.1 points, while a fall of 1.1 points meant the Europe to Asia lane finished August at 57.8.
