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Stifel confidence index continues high, but US-EU trade lane wobbly

THE Stifel Nicolaus Logistics Confidence Index continued to rise into November in its 10th month of registering above 50 with a monthly increase of 2.5 points up to 57.1.

The index includes a monthly survey of international shippers and forwarders that measures freight activity across several European trade lanes. An index value of 50 indicates no change in the volumes currently being experienced for the time of year; above 50 indicates higher volumes, while below 50 indicates lower volumes.

For the first time air and sea indices were above the 50-level. The index level for air freight exceeded the 50-level for the first time, rising in Europe to Asia route in October by 2.8 points to 50.9.

The air freight market showed signs of positive growth with the greatest increase on the Europe outbound lanes to Asia up by 5.3 points to 51.8 and to the US up to 53.7, at a 1.8 points. The only decline registered below 50 was the US to Europe lane, which declined one point to 44.4.

The sea freight index increased 3.3 point to reach 57.9 with a recent strong increase of 6.6 points to 53.7. The six-month forecast is for a slight decline of 0.1 points to 62.0 with Asian lanes on the increases and US on declines. The US to Europe tradelane is forecast to increase only 0.2 points to 54.3. This is attributed to a still weak European economy and US governmental shutdown in October.

Respondents of the survey were divided on whether sea freight rates have bottomed out with 42.3 per cent disagreed, 33.1 per cent unsure and 24.6 per cent in agreement with some saying established lanes had, while new or emerging lanes remained up. Overall, those surveyed noted the significance to rates and capacity of P3 alliance's launch early 2014.

Overall, the Logistics Confidence Index will show slight growth for the next six months increasing 0.1 point to 61.8 due to expanding economies supporting air and sea volume.