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Confidence low as the Stifel Logistics Index posts slight decline

THE Stifel Logistics Confidence Index saw a marginal month on month decline in its May results, as an improvement in air freight confidence was countered by a decline in ocean freight.

The ocean freight industry looks to be heading for another year of losses, according to industry consultants Drewry.

"Carrier profit margins this year will be influenced by big swings on both prices and costs, but as things stand carriers will lose between US$6 billion - $10 billion this year," Drewry analysts said.

This followed on from the release of first quarter results from carriers, including Maersk and Singapore's NOL and its box unit, APL.

A further negative indication of the market's performance was the decision of CMA CGM to pull its 18,000-TEU Benjamin Franklin from the transpacific after just five months of service.

The company cited weak market conditions as the reason behind this decision, and announced that it would be redeployed to the Asia-Europe trade route.

With regards to the air freight market, the picture was also negative in the first quarter, as global freight tonne kilometres (FTKs) declined two per cent year on year. This was despite capacity growth of 6.9 per cent.

Nonetheless, there were positives. Despite the tragic events in Brussels, Airports Council International (ACI) reported that quarterly freight traffic across Europe was up 2.1 per cent year on year.

IATA saw FTK growth of 1.3 per cent in Europe during the same period, with the Middle East also improving 2.4 per cent.

Nonetheless, the largest region by market share, Asia Pacific, saw FTK declines of 5.2 per cent throughout the same period. North American FTKs also contracted by 1.8 per cent.