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Stifel air freight confidence hits 2015 low after promising end to 2014

THE Stifel Logistics Confidence Index fell for a third consecutive month in August. With the overall index standing at 54.1, the first eight months of 2015 having marked by decline.

Not only is the index at its lowest point of the year, fierce competition, volatility and overcapacity have driven it to its lowest point since September 2013.

Providing most concern seems to be the six-month outlook - a fall of three points brought the Logistics Expectations Index to 56.9, its lowest point since January 2013.

On the release of volume statistics which showed a 3.5 per cent year-on-year increase over the first half of 2015, the director general of the International Air Transport Association (IATA) noted that it had been "a disappointing first half of 2015, especially considering the strong finish to 2014".

Air freight volumes in June indicated a continuation of slowing tonnage growth, according to IATA. Weak global growth and declining trade activity saw volumes increase at a rate of just 1.2 per cent for the month, a margin barely enough to repel claims of stagnation.

"As a result, the Logistics Situation Index for air freight fell 4.1 points to 51.3, its lowest point of the year. No individual lane saw an increase, but it was lanes out of Europe that performed most poorly to weigh on the index," said the Stifel analysts.

"A fall of 7.2 points saw the Europe to Asia lane record a score of 48.4, while the Europe to US lane lost 5.6 points and fell to 57.8 as a result. A loss of 2.4 points saw the US to Europe lane fall back below the neutral 50 mark to 48.3, as the Asia to Europe lane showed a drop of 1.3 points to 50.6," they said.

"The Logistics Expectation Index for air freight made for troubling reading for those hopeful of a repeat of last year's strong finish as it shed 3.2 points to a mark of 57.3," they said.

The Asia-Europe lane led the decline with a fall of 4.5 points to 58.2, while the reverse Europe to Asia lane didn't fare too much better as it recorded a decline of 3.7 points to a six-month low of 55.8.

The US to Europe lane lost 3.1 points as it hit 55.1 in August. Although the Europe to US lane fell 1.2 points to 60.1 for the year, its lowest mark since October 2014, there is still perhaps some optimism to be found in its year-on-year performance which places it 7.7 points ahead of August 2014.