Stifel survey shows continuing fall in logistics confidence internationally
Belief in the global freight transport and logistics outlook is “plummeting”, according to the Stifel Logistics Confidence Index.
The monthly index, released by international publication Transport Intelligence (Ti), measures how much conviction there is in the future of air and sea freight and is seen as one proxy for the health of global trade.
This month’s index shows what there is has dissipated further, having now fallen beneath the neutral 50 point mark for the first time since January 2013 after a fifth consecutive month of decline.
Shipping is bearing the brunt but air freight is also sick.
“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 index report says.
“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’.”
However, there merest sliver of a silver lining was observed in all shipments from Europe to US, with the weaker Euro seen as its impetus.
The report quotes, Richard Grieveson of the Economist Intelligence Unit stating that “the US, non-Eurozone EU and Spain have been key in driving exports” for Germany, even as the country’s industrial orders declined in August.
Industry debate mid-year was on the possibility of ‘re-shoring’ or ‘near-shoring’, the perceived reaction to off-shoring that had been prevalent this century as China offered a low-cost option for manufacturing, particularly for European vendors.
Specifically, participants were asked whether or not the decline in the Euro versus other world currencies has made near-shoring or re-shoring more attractive.
“Whilst 36% of respondents believed that it has, the largest response group was “unsure”, with 40% of the sample selecting this option,” the report states.
“The remaining 24% thought that that the Euro’s decline did not make re-shoring or near-shoring more attractive.”