The Stifel Logistics Confidence Index for May indicated some
improvements from April’s decline. In particular, the six-month outlook
appears bright as airfreight gained 2.8 points to 63.4 and sea freight
increased 2.1 points to 62.9.
Overall, the total index increased 1.1 points to 57.4. Even though
this is down 0.6 points from one year ago, it is still 6.7 points higher
than May 2013.
Airfreight continues to lead the optimism for both the six-month
outlook as well as for the present. Sea freight however, remains
troublesome for the present and while some ports have settled labour
issues, other issues such as the rise of the mega-vessel and larger
shipping alliances are straining port operations. Congestion is a big
problem for many ports and perhaps airfreight is currently benefiting
from this misfortune of ports.
Airfreight
For the present, favourable currency
rates probably helped boost the Europe to Asia and Europe to US trade
lanes both noting big gains from April, up 7.0 and 3.0 points
respectively (58.2 and 62.7). The only declining trade lane for the
month was recorded for Asia to Europe, down 2.0 points to 52.6. The US
to Europe lane was up 0.7 points to 48.1 to complete the trade lane
list. This marks the second month in a row for contraction along the US
to Europe lane, most likely due to the strong US dollar.
By trade lane, the outlook is positive for all trade lanes with Asia
to Europe gaining the most points, 3.5 from the previous month to 67.1.
Europe to US gained 3.0 points to 63.8 while Europe to Asia increased
2.5 points to 64.7 and US to Europe up 1.6 points to 56.7.
Sea freight
The present situation for sea freight
noted a worrisome decline of 2.6 points to 47.7. This is the first time
since October 2013 that the present sea freight sub-index fell below
the 50-level. Furthermore, three of the four trade lanes we track are
currently below this 50-level, which means contraction. For the
tradelanes Europe to Asia and US to Europe, this marks the second
consecutive month of contraction. While the Europe to Asia lane actually
noted a slight increase, 0.2 points to 47.6, the US to Europe lane
declined even further, 5.0 points to 41.5. Meanwhile, Asia to Europe
slipped below the 50-level for the first time since October 2013. It
fell 4.7 points to 48.9. Europe to US remained the only lane above the
50-level but also declined, 0.9 points to 52.0.
The six-month outlook was a bit more positive with all lanes noting
gains. Europe to Asia noted the biggest gain at 3.0 points to 66.2
followed by Europe to US, up 2.7 points to 65.7. Asia to Europe was up
1.9 points to 64.0 and finally US to Europe increased 0.7 points to 4.7.
For all lanes, the six-month outlook for sea freight was up 2.1 points
to 62.9.
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