Executive Briefings

Pessimistic Forecasts: Stifel Logistics Confidence Index Declines Further

The Stifel Logistics Confidence Index - which measure logistics industry outlook - has reached its 14 consecutive months of negative confidence, with the numbers suggesting this will continue into 2017. As reflected by the performance of the Index, global trade remains at a low ebb, as it has for some time.

Efforts remain underway to get to grips with overcapacity in the container shipping industry, with the Baltic and International Maritime Council reporting at the start of November that containership demolition has reached an all-time high, with ships totalling a capacity of 500,000 TEU having already been scrapped this year.

Nonetheless, most of this demolition is accounted for by now-obsolete Panamax vessels, which continue to be replaced by bigger ships. Drewry reported in October that the next two years will witness, "annual fleet growth of between 5 and 6 percent and many more ultra large container vessels (ULCVs)", though the consultancy claims the market has bottomed out.

One bright spot at present is the performance of air freight. Whilst officials at IATA have stressed that the long-term condition of the industry is not good, the organisation did report that freight volumes increased by 6.1 percent year-on-year (measured in FTKs) in September, exceeding a capacity increase of 4.7 percent over the same timeframe. This tallies with the results of the Situational Index for Air Freight; the one bright spot in the Stifel Logistics Confidence Index this month, which recorded an improvement in the present market.

Source: Transport Intelligence

Efforts remain underway to get to grips with overcapacity in the container shipping industry, with the Baltic and International Maritime Council reporting at the start of November that containership demolition has reached an all-time high, with ships totalling a capacity of 500,000 TEU having already been scrapped this year.

Nonetheless, most of this demolition is accounted for by now-obsolete Panamax vessels, which continue to be replaced by bigger ships. Drewry reported in October that the next two years will witness, "annual fleet growth of between 5 and 6 percent and many more ultra large container vessels (ULCVs)", though the consultancy claims the market has bottomed out.

One bright spot at present is the performance of air freight. Whilst officials at IATA have stressed that the long-term condition of the industry is not good, the organisation did report that freight volumes increased by 6.1 percent year-on-year (measured in FTKs) in September, exceeding a capacity increase of 4.7 percent over the same timeframe. This tallies with the results of the Situational Index for Air Freight; the one bright spot in the Stifel Logistics Confidence Index this month, which recorded an improvement in the present market.

Source: Transport Intelligence