Sentiment may be down but markets continue to rise

Before the holiday season, the logistics market was confronted by a picture of rising demand for freight combined with falling freight rates in both the sea and air sector. For the first few months of this year this situation appears to have changed, with volumes apparently still rising, but freight rates hardening.
 
In the container shipping sector, volumes are generally growing in mid single-digit percentages. Asian shipping volumes saw a gross increase of 15% for exports and 8.8% for imports for February which, after stripping away the seasonal noise, represents a year-on-year increase of 4.3% (Ti Dashboard – Shipping Volumes: Asia). Demand is perceived to be driven by the US which is experiencing substantial traffic growth, both in terms of imports, which grew by 22% in February, and exports, which grew by 10.6%; although again the import numbers in particular are affected by seasonality (Ti Dashboard – Shipping Volumes: North America). In addition, Europe is also seeing buoyant export traffic; however imports continue to be weak (Ti Dashboard – Shipping Volumes: Europe).
 
It is reasonable to suggest that this underlying strength in demand is what is supporting the strength in sea freight rates. Here, the trend of hardening prices has flattened a little, after seeing a second big jump in early march. There are suggestions that shipping lines are considering increasing rates again, so they appear to be confident that these will stick; at least in the short-term.
 
The latest numbers on air freight from IATA are much more equivocal than the picture in sea freight as February saw falling volumes as compared to January. Although year-on-year figures were complicated by political events last year, Asia-Pacific saw a 1% growth between January and February and the Middle-East region continued to grow strongly, but the rest of the world saw a 1.9% fall in international freight volumes. Load-factors have edged down slightly, but not enough to drive down rates any further. In terms of the structure of the market, it might be suggested that sea freight rates still remain low enough to tempt business away from air freight, whilst in contrast the increase in demand generally is not rapid enough to make freight-buyers need to turn to air freight.
 
Sentiment is being affected by the concern that the underlying indicators of demand remain uncertain. For example, at the micro-economic level, the moderately useful indicator of global semi-conductor sales has fallen noticeably over the past month (Ti Dashboard – Semi Conductor Sales). Although sales revenue has been fairly flat up until the end of January, February saw an actual decline of 7.3% as compared with the same period in 2011. This marks a notable decline in level of growth, beyond even the seasonal trend.
 
Due to this uncertainty, combined with continuing nervousness over the condition of the euro area, falling growth rates in China and a sluggish recovery in the US, it is unsurprising that few in the logistics sector are optimistic. Yet that view runs the risk of under-playing the continuing strength of world trade that has been evident since early 2010.

Quelle: eyefortransport

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