Not only has the Index reached its lowest point in some 26 months, it also recorded its fastest pace of decline since June 2014, a 2.6 point loss against the 54.1 recorded in August. September's most concerning figure comes from the Logistics Situation Index - at 49.4, the index indicated an erosion in confidence, likely based on a combination of China's slowing economy, general weakness in emerging markets and tepid global trade.
Perhaps more pressing on the agenda of the industry, though, will be the six-month outlook - a fall of 3.3 points brought the Logistics Expectations Index to 53.6, representing a loss of 9.6 index points in the last four months alone. Indeed, the picture painted by the future-gazing Index gets even worse when expectations for the sea freight market are examined. The loss of 3.5 index points in a month put the Logistics Expectations Index for sea freight at 52.9, a mark some 12.2 points below the confidence levels of September 2014. Combined with a Logistics Situation Index for sea freight of 49.8, it is perhaps little wonder that executives at Maersk Group’s Capital Markets Day suggested that container lines were “operating in an unhealthy industry.”
Airfreight
Air freight volumes fell in July, down marginally by 0.6 percent when measured by FTK, according to IATA. Weak global growth, a turbulent few weeks in the Chinese economy and general weakness in emerging economies were blamed for the fall. The results of this put all but one trade lane below the neutral 50 mark for September. Europe to Asia was hurt the most as it fell 3.7 points to 44.7, while the reverse lane lost 3.1 points as it fell to 47.5. The US to Europe lane also finished below the 50 mark, at 49.6, although this represented a 1.3 point gain over August. Europe to US remained seemingly healthy, at 54.4 for September, although this was 3.4 points lower than the 57.8 mark seen in August. Overall, at 48.9, the Logistics Situation Index for airfreight was 2.4 points down on the previous month, and 4.1 points down compared with September 2014.
The Logistics Expectation Index for airfreight saw even more rapid declines, shedding 3.1 points compared with August to finish at 54.2 as all lanes saw falling confidence. Losing the most was the Asia to Europe lane which declined 4.4 points to 53.8, while the Europe to Asia lane saw a 4.0 point dip to 51.8. A 2.3 point decline meant the US to Europe lane ended September at 52.8, while a loss of 1.8 points had the Europe to US lane ending the month at 58.3.
Sea Freight
A 1.4 point fall in the Logistics Situation Index for sea freight saw the index dip back below the neutral 50 mark after two months of expansion. Just a single lane saw growing confidence in September, the US to Europe lane which rose 0.4 points to 48.2. The Europe to Asia and Asia to Europe lanes both saw a 2.3 point decline to 48.7 and 54.1 respectively. The Europe to US lane fell 0.9 points to 47.6.
All lanes saw declines in September’s Logistics Expectations Index for sea freight, as the overall index was down 3.5 points to 52.9. The Asia to Europe lane fell 5.3 points to 52.8, while the Europe to Asia lane also lost 5.3 points, ending at 52.5. A 2.2 point fall dragged the Europe to US lane down to 55.9, while a loss of 1.0 points meant the US to Europe lane recorded a mark of 50.1 in September.
