Each month, the Stifel Logistics Confidence Index allows us to look into the crystal ball to reveal possible future trends in logistics. Reflecting back on December 2015, very few people in the industry like what they see for 2016 , based on current experience.
The overall December index, calculated from the survey responses of approximately 200 logistics professionals, fell for the seventh straight month, hitting an all-time low of 45.4 points, which is the third sub-50 reading in a row. An index value below 50 indicates lower volumes, and, in this case, it indicates a market squarely in contraction.
This current low is 1.9 index points below the previous all-time low, in October 2012, when the market was mired in the depths of the European sovereign debt crisis. As the case has been for several months, the only lane that was somewhat robust in December was the Europe-to-United States route because of the strength of the U.S. dollar. Stifel’s six-month outlook was much bleaker than the report from six months ago, which may suggest a volume lull hanging over the market for next two quarters.
In airfreight only, the index contracted by 2.3 points, year-over-year, in December 2015, amounting to 46.6 points. This is 9.2 points lower than the index reported for the previous December and 9.8 points lower than the December 2013 figure.
The present airfreight outlook index fell by 1.6 points, compared to November 2015, to reach 43.8 points. All lanes post continued month-over-month losses, with the exception of the Europe-to-U.S. route, which gained 1 point, month-to-month, to reach a healthy 57.4 points. The U.S.-to-Europe lane fell to 42.6 points after losing 3.5 points compared to November, while Asia-to-Europe (41.3 points) and Europe-to-Asia (34.8 points) lost 1.1 and 3.1 points, respectively, compared to the previous month.
Forecasting ahead six months to June 2016, there were no exceptions to the overall pattern of decline in airfreight expectations, Stifel found. The current Europe-to-Asia prediction looks to be essentially flat, falling just 0.1 points to 47.4, compared to the November 2015 outlook, while U.S.-to-Europe figure dropped 1.5 points, compared to the previous month, to 49.2 points. Europe-to-U.S. stood out as the only lane with a brighter six month outlook, expanding to 54.2 points, but the sequential pattern was still indicating a decline of 4.6 points over the six-month period. The Asia-to-Europe outlook was particularly grim, which, at 46.9 would be below the 50 point mark for the first time since December 2012, representing a 5.5-index-point loss since December 2015.