Freight forwarders more upbeat about airfreight than sea freight

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freight forwarderGlobal freight forwarders are optimistic about prospects in the next six months, especially in airfreight, where confidence in most trade lanes showed a notable improvement probably due to the ongoing sea freight difficulties, according to the latest Stifel Logistics Confidence Index.

Results of the index for May showed some improvements in respondents’ confidence 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, said the report.

Airfreight continues to lead the optimism for both the six-month outlook as well as for the present.

Sea freight remains troublesome for now. Even as some ports have settled labor issues, other problems persist, such as the rise of the mega-vessel and larger shipping alliances, both of which are straining port operations.

“Congestion is a big problem for many ports and perhaps airfreight is currently benefiting from this misfortune of ports,” observed the report.

Favorable currency rates appear to have a hand in boosting current positivism in the Europe-Asia and Europe-U.S. trade lanes, both noting big gains from April, up 7 and 3 points, respectively, from 58.2 and 62.7.

The only declining trade lane for the month was recorded for Asia-Europe, down 2 points to 52.6. The U.S.-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 U.S.-Europe lane, most likely due to the strong U.S. dollar, said the report.

By trade lane, the outlook is positive for all trade lanes, with Asia-Europe gaining the most points, up 3.5 from the previous month to 67.1. Europe-U.S. gained 3 points to 63.8, while Europe-Asia increased 2.5 points to 64.7 and U.S.-Europe is up 1.6 points to 56.7.

But forwarders’ outlook for sea freight for the present showed a worrisome decline of 2.6 points to 47.7. This is the first time since October 2013 that the sea freight sub-index fell below the 50 level.

Furthermore, three of the four trade lanes tracked by Stifel are currently below this 50 level, which means contraction. For the trade lanes Europe-Asia and U.S.-Europe, this marks the second consecutive month of contraction. While the Europe-Asia lane actually noted a slight increase, 0.2 points to 47.6, the U.S.-Europe lane declined even further, 5 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-U.S. remained the only lane above the 50 level but also declined, 0.9 points to 52.

The six-month outlook for sea freight was a bit more positive with all lanes noting gains. The Europe-Asia route noted the biggest gain at 3 points to 66.2, followed by Europe to U.S., up 2.7 points to 65.7. Asia-Europe was up 1.9 points to 64, and finally U.S. 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.

Meanwhile, asked if currency had a meaningful impact on shipments from Europe to the U.S., a clear majority of survey respondents—62.4%—indicated an impact, while 16.5% indicated currency had no impact. The final 21.2% were unsure.

Photo: Jim Gordon