Stifel indicates waning confidence in air cargo

Of the respondents to the November monthly question asked in the Stifel Logistics Confidence Index survey, 36 percent felt the upcoming peak season would be weaker than the average peak, while 33 percent said they believed it would be significantly weaker, to non-existent. The balance, evenly divided, said it was too early to tell or that it would be a healthy peak season.

Each month the logistics investment analysts take the pulse of the logistics market based on responses from approximately 200 logistics professionals, calculating a point-based index, the LCI, with 50 points representing a neutral response. Confidence in airfreight decreased 0.3 points to an LCI score of 48.9 LCI, which is 8.1 points lower than November 2014 and 7.4 points lower than November 2013.

The trade lanes included in the survey include Europe to Asia, Asia to Europe, Europe to the U.S., and U.S. to Europe. The only trade lane that noted a gain was Europe to the U.S., which was up year-over-year by 0.1 points to 56.4 points. U.S.-to-Europe remained unchanged from October 2015 at 46.1 points, while Asia-to-Europe fell 0.2 points to 42.4, and Europe-to-Asia fell 1.1 points to 37.9, compared to the previous year.

The survey questions participants as to volumes they are experiencing at present, relative to the time of the year, as well as how they expect their business to look over the next six months.

For the six-month outlook (to May 2016), the expectation for total airfreight decreased slightly, by 0.4 points to 52.3 points. The U.S.-to-Europe and Asia-to-Europe trade lanes expect gains, up 1.7 points to 50.7, and 1.0 points to 52.4, respectively. However, Europe-to-Asia and Europe-to-U.S. are expected to fall by 2.2 points to 47.5, and 2.1 points to 58.8, respectively. The report noted that sentiment on the Europe-to-U.S. trade lane remained high.

The overall outlook for all modalities slid downward for the sixth consecutive month, this time  by 3.4 percent to 47.4 – the second sub-50 reading in a row. The 47.4 score is also the lowest reading since November 2012 and only 0.1 index points above the all-time low of October 2012, when the European debt crisis was in full swing. Stifel said that, despite reports of some strength in consumer markets in China and Europe, it has not translated in trade volumes, with the overall global demand picture remaining weak.