Global Logistics Index Hots Lowest in Four Years
The index that tracks shipper and freight forwarder confidence in the activity of the U.S.-Europe and Asia-Europe shipping lanes hit its lowest level in December in the index's nearly four-year history, reports Reuters.
It has hit by lower margins for European freight forwarders such as Denmark's DSV because of overcapacity in shipping.
The "Stifel Logistics Confidence Index," published by U.S. investment firm Stifel Financial Corp. and U.K.-based consultancy Transport Intelligence showed particularly low confidence in the transport business along the Asia-Europe routes where spot freight rates were barely profitable for shipping companies for much of last year.
The Index posted a score last month of 45.4, continuing what has been a months-long decline. The index, which was first published in March 2012, covers two-way air and sea trade between the U.S. and Europe, and similar activity in the Asia-Europe trade.
However, future expectations were slightly improved, with companies expecting overcapacity to lessen, Ti said.
Of the four trade lanes, the Europe-to-U.S. lane recorded the best readings for air and ocean shipping, both in terms of the current situation and six months out, the index found.
The main reason for the relative outperformance has been the impact of a strong U.S. dollar versus the euro, which has made European exports more price competitive, according to the authors. By contrast, the performance of trade lanes between Europe and Asia, in both directions, continues to be poor, the index found.
The logistics confidence Index for sea freight declined by 1.8 points to 44.3. Compared with the same month in 2014, the Index is 14.7 points lower, and it is also 14.3 points lower than in December 2013.
For the present situation, the Index fell 3.3 points to 40.7. All lanes noted declines in December, though Europe to US lost only 0.8 points, and therefore remained in a stronger position than the others at 55.0.
Having declined by 4.7 points from November, Europe to Asia was the weakest of the lanes, and recorded a total of 32.9. Asia to Europe noted an even greater decline of 5.0 points, and stood at 36.1. US to Europe recorded a moderate loss of 2.6 points, which brought it to 40.4 overall.
The expected situation Index for sea freight was more positive than the present situation, with mixed results aggregating to a 0.2 point decline. Europe to US saw the most positive result, gaining 0.8 points to 56.9, whilst Asia to Europe similarly gained 0.7 points to score 47.8. Europe to Asia saw a 0.3 point decline to 44.7, but US to Europe was down 2.1 points to 42.7.
