LSP results do not show recession yet

The mood surrounding the macro-economic environment tells us that much of the developed world is on the brink of a recession; comparable to that triggered by the collapse of Lehman Brothers in 2008. Yet look at the recent results of the major logistics service providers and we get a different impression.

Air freight is one of the worst performing sectors, with falls experienced by DP-DHL and Panalpina amongst others. Whilst Kuehne and Nagel saw a double digit growth in its business, it admitted that the market as a whole was flat or shrinking. The nature of growth has also changed, with Asia-Pacific depressed both by a lack of demand and over-capacity. In contrast, traffic out of Europe and North America is continuing to grow. Overall, it appears that the market will shrink this year in low single digits or perhaps just register no growth.

In contrast, the ocean freight business is a more cheerful prospect for the big LSPs. Their freight forwarding businesses may have been benefitting from rock-bottom container freight rates, but they are also seeing volume increases. Admittedly the speed of this increase may be slowing, but Kuehne + Nagel estimates that the market will finish the year 5% up and it competitors more or less agree.

Whilst the market is not seeing the boom experienced in late 2009 and 2010, it also has not experienced a crash in volumes similar to late 2008.

This also applies in contract logistics. Here the most marked difference to 2008-9 is the resilience of areas such as automotive production. CEVA last week reported that it continued to benefit from the strength of car production in Europe and North America, although China was experiencing a slowing market. During 2008 and 2009 the car industry was savaged with falls of almost 50% in production for a couple of quarters.

Of course there are areas of pain. Maersk may be one of the strongest of the big container shipping-lines, but it expects to lose money this year. Though the state of the shipping sector is a self-inflected wound produced by its ability to create over-capacity.

These numbers might be viewed as backward looking. However, they may also suggest that whilst the traffic in consumer products heading out of China may be depressed, other areas of world trade, such as exports out of the Western economies, may compensate to a degree. What the figures definitely do not show yet is a collapse in confidence of the scale seen in 2008.

Quelle: eyefortransport
Portal: www.logistik-express.com