Whilst also demonstrating a month on month decline, the six-month outlook for both air and sea freight fell at a lesser rate than that recorded in the September Index, falling by 1.8 points. Nonetheless, the total was 10.4 points lower than at the same point last year, and 9.9 points lower than in October 2013. Sea freight was down more significantly than air, falling 2.1 points to 50.8. This total was 13.9 points lower than that recorded in October 2014. The shipping industry continues to be plagued by overcapacity, with Drewry’s director of container shipping research stating that this crisis “will worsen next year”, adding, “were it not for the recent fall in bunker prices, shipping lines would be losing money”.
On the positive side of this month’s results, a noteworthy trend depicted within the Index was the encouraging performance of all shipments on routes from Europe to the U.S. A growth trend was visible within both air and sea freight, and for the present and expected situations. It is arguable that the driving force behind this is the weaker valuation of the euro, which has encouraged exports across the Atlantic. For example, Richard Grieveson of the Economist Intelligence Unit lent some weight to this assertion by stating that “the U.S., non-Eurozone EU and Spain have been key in driving exports” for Germany, even as the country’s industrial orders declined in August.
Airfreight volumes were flat in August, with a marginal FTK gain of 0.2 percent year on year, according to IATA. The organization noted a perceived pause in the downward trend of global trade volumes in explaining the reason for this respite. Within the survey results however, there was no such let-up in the decline, as indicated in the opening paragraph. All lanes were down for the month, with the exception of Europe to the U.S., which was up by 1.9 points to 56.3. Europe to Asia noted the biggest fall, down 5.7 points to 39.0, followed by Asia to Europe, which decreased 4.9 points to 42.6. U.S. to Europe declined 3.5 points to 46.1.
For the six month outlook, the expected situation index for total airfreight also decreased, by 1.5 points to 52.7. Again, the Europe-to-U.S. lane was the only one bucking the downward trend, gaining 2.6 points to 60.9. By contrast, US to Europe noted the greatest fall, declining 3.8 points to 49.0. Asia to Europe fell 2.4 points to 51.4, whilst Europe to Asia lost 2.1 points, amounting to 49.7.
For the present situation, the sea freight index fell further beneath the neutral mark of 50, declining 2.9 points to 46.9. All lanes noted declines in October, with the exception of Europe to US, which rose 4.4 points to 52.0 for the month. This saw the lane rebound somewhat, after successive declines in August and September, though it remained beneath the previous year’s total for October. Amongst the other trade lanes, Asia to Europe noted the steepest decline, falling 7.0 points to 47.1. Meanwhile, Europe to Asia fell by 5.1 points to 43.6, and US to Europe lost 2.4 points to total 45.8.
The expected situation index for sea freight decreased 2.1 points to 50.8. Again, Europe to US grew, by 0.8 points to 56.7, meaning that this lane noted gains across the board. This was in stark contrast to the other lanes. The greatest decline was recorded in US to Europe, which fell 3.2 points to 46.9. Europe to Asia fell by 2.7 points to 49.8, whilst Asia to Europe noted a similar contraction of 2.6 points, amounting to 50.2.
