What does 2012 hold for the logistics industry?

2011 was the third year of what has been called by the economist Paul Krugman, the "lesser depression".

This phrase attempts to describe the prolonged lack of growth as well as the periods of contraction seen over the past three or four years. Of course there will be some who immediately point out that emerging economies have been growing consistently and that world trade has continued to increase at a substantial rate.

Indeed the strength of world trade in particular has meant that for some parts of the logistics sector this period has been positive. 2011 saw modest growth with even previously savaged areas, such as automotive logistics, performing well. Only towards the end of the year have there been signs that demand is falling.

However, 2012 may not be such a good year. The second wave of macro-economic pain is likely to exact a heavier toll than the first.

The sector most at risk is shipping. There is a considerable probability that the sea freight sector will undergo systemic restructuring. The margins in both the bulk and container sectors fell off a cliff two quarters ago and 2012 will see the effects of this. Unless there is a rebound of the magnitude seen in late 2009, the sector will probably see a rationalisation of remarkable aggression. Possibly, the container shipping sector will begin to consolidate into just a few giant firms with a pricing power to match. Up until then, freight forwarders are likely to profit from rock bottom rates.

The airfreight sector is less vulnerable. It may have suffered falling volumes out of the once solid Asia Pacific market and there is likely to be restructuring especially of dedicated freight airlines. As ever, though, it is the passenger business that will drive any change here and passenger numbers so far are robust.

Contract logistics will once again prove itself to be a haven of stability. Many of its core customers such as fast moving consumer manufacturers and retailers are becalmed in western markets and slowing even in developing ones. Yet volumes are unlikely to crash. Even the car industry is continuing to grow, sustained by strong exports from Europe. However the prospects for individual logistics service providers are less certain. Too many fail to cover their costs of capital and so a wave of mergers and acquisition looks all too possible.

This will impact not just on the private sector as many of the state owned industry giants may also face hard questions. The nations of Europe are engaged in brutal budget reductions and the attraction of privatisation must be on the agenda. This will have implications for Deutsche Post-DHL, DB Schenker and Geodis.

The real bellwether of the economy is road freight. Returns here are frequently terrible yet the likes of YRC in the US continue to survive. Surprisingly this may be an industry that sees less change than others due to its familiarity with managing crises.

Another huge question for the logistics sector is the future of China. It shaped so much of the world’s supply chain in the past decade, yet its economy is said to be faltering. What is clear is that exports to the west are slowing. Will 2012 see the beginning of metamorphosis for the China trade?

So with low freight rates and huge restructuring, 2012 is likely to be full of opportunities for investment bankers and freight forwarders. Perhaps it will not be so different from 2011 after all.

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