Logistics posted fastest decline in September–study

SLOWDOWN in global trade, together with China’s slowing economy and general weakness in emerging markets, has pulled down further the performance of logistics industry across Asia, America and Europe, according to a study.

Transport Intelligence (Ti) reported that the Stifel Logistics Confidence Index in September fell to 51.5 points—a fourth consecutive month of decline this year.

While it’s still more than the neutral 50-point mark, the numbers alone indicated that times may be gloomier.

Not only has it reached its lowest point in some 26 months. It, likewise, registered a rapid pace of decrease since June 2014, a 2.6-point loss compared to 54.1 points recorded in August.

This month also saw the Logistics Situation Index  (LSI) dropping to 49.4 points, indicative of a continued erosion in confidence.

What’s more alarming is the six-month outlook as a 3.3-point decline brought the Logistics Expectations Index  (LEI) to 53.6 points, or a loss of 9.6 index points in the last four months alone.

The International Air Transport Association said that the measured air freight volumes marginally went down in July by 0.6 percent.

As a result, almost all the trade lanes, except for one, were below the neutral 50-level point for this month.

Europe to Asia was affected the most with a decrease by 3.7 points to 44.7 points, while the reverse lane lost 3.1 points to 47.5 points.

Even though the US to Europe lane gained a 1.3-point over August, it remained below the 50 mark at 49.6 points.

Settling at 54.4 points for September, Europe to the US seemed robust although this was 3.4 points lower than the 57.8 mark seen in August.

Overall, the LSI for airfreight at 48.9 points in September 2015 was 2.4 points lower than the previous month and 4.1 points down compared with the same period of last year.

Similarly, the LEI saw even more rapid declines, losing 3.1 points in August to end at 54.2 points as all lanes saw falling confidence.

Shedding most points was the Asia to Europe lane, which decreased by 4.4 points to 53.8 points, while the reverse lane realized a four-point dip to 51.8 points.

A 2.3-point drop showed that the US to Europe lane ended at 52.8 points this month, while a loss of 1.8 points had the Europe to US lane capping September at 58.3 points.

After two months of expansion, the LSI for seafreight went back below the neutral 50 mark to 49.8 points, representing a 1.4-point fall.

Only the US to Europe lane gained confidence this month, which rose 0.4 points to 48.2 points.

The Europe to Asia and Asia to Europe  lanes both had a 2.3 point decline to 48.7 points and 54.1 points, respectively. The Europe to US lane fell 0.9 points to 47.6 points.

All these seafreight lanes dropped in September’s LEI as the total index was down 3.5 points to 52.9 points.

The Asia to Europe lane fell 5.3 points to 52.8 points, as the opposite Europe to Asia lane also lost 5.3 points, ending at 52.5 points.

A 2.2-point drop pulled the Europe to US lane down to 55.9 points, while a loss of 1.0 points meant the US to Europe lane recorded a mark of 50.1 in September.

Combining the logistics situation and situation indices for sea freight clearly showed that container lines were operating in an unhealthy industry.

Ti is one of the leading international providers of expert research and analysis dedicated to the global logistics industry.


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