The continuation of negative macroeconomic trends at the global level, principally emanating from China, represent the principal cause of this. Chinese retail sales were up by 11 percent year on year in October, but the country saw exports fall by 6.9 percent over the same time-frame in value terms, whilst the import decline was even worse at 18.8 percent.
The six-month outlook for both air and sea freight fell at the same rate as the present situation, declining 1.6 points from October to total 50.2. When compared to the figures measured in previous years though, it is significantly lower; the Logistics Expectations Index is down 12.4 points against November 2014, and 11.6 points against November 2013. The source of the decline is clear when expected performance is broken down. Sea freight fell by 2.7 points to 48.1 in November, whilst airfreight fell by only 0.4 points to 52.3, remaining above the 50 point mark. The reason for this is the systemic overcapacity that has come to characterize container shipping, which is driving carriers to consider desperate measures in order to survive. A stark reminder of how damaging the situation has become was Maersk’s decision to lay-up one of its 18,000 TEU Triple-E class vessels in what Drewry has described as a “wake up call” for the industry.
Last month, the Europe-to-US lane represented the sole bright spark within the Index, and this has continued, at least with regards to the present situation. The Europe-to-US sea freight trade lane grew by 3.8 point month-on-month, which brought it to 55.8. The airfreight Index also recorded growth on this lane, albeit at 0.1 points to 56.4. Nonetheless, in each case the Europe-to-US lane remains the only one in the present Index which stands above the 50 point mark.
The total airfreight logistics confidence Index decreased 0.3 points from October to 48.9 in November 2015. Compared with November 2014, the Index is 8.1 points worse, while it is also 7.4 points lower than November 2013. In terms of the present situation, the airfreight Index fell by 0.3 points to 45.4. Only one lane noted a gain this month, Europe-to-US, which was up by 0.1 points to 56.4. US-to-Europe remained unchanged from October at 46.1, whilst Asia-to-Europe and Europe-to-Asia both fell, the first by 0.2 points to 42.4, and the second by 1.1 points to 37.9.
For the six-month outlook, the expected situation Index for total airfreight also decreased slightly, by 0.4 points to 52.3. Trade lane performance was split. US-to-Europe and Asia-to-Europe both saw gains, up 1.7 points to 50.7 and 1.0 points to 52.4, respectively. By contrast, Europe-to-Asia and Europe-to-US were both down, by 2.2 points to 47.5 and 2.1 points to 58.8, in turn.
For sea freight, the logistics confidence Index fell 2.8 points to 46.1. Compared with the same month in 2014, the Index is 15.0 points lower, and it is also 11.8 points lower than in November 2013.
For the present situation, the Index fell 2.9 points to 44.0. All lanes noted declines in November, with the exception of Europe-to-US, which again rose by 3.8 points to 55.8 for the month. Asia-to-Europe and Europe-to-Asia both fell by 6.0 points, standing at 41.1 and 37.6, respectively. US-to-Europe fell by 2.8 points to 43.0.
The expected situation Index for sea freight decreased 2.7 points to 48.1. Unlike the present situation Index, all lanes saw declines here. The most significant of these was recorded in Europe-to-Asia, which fell by 4.8 to 45.0. Next was Asia-to-Europe, which dropped 3.1 points to 47.1, followed by US-to-Europe, which was down 2.1 points to 44.8. Europe-to-US saw a slight decrease, of 0.6 points, and stood at 56.1 for the month.
Source: Transport Intelligence
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