The Stifel Logistics Confidence Index for May indicated some improvements from April’s decline. In particular, the six-month outlook appears bright as air freight gained 2.8 points to 63.4 and sea freight increased 2.1 points to 62.9.
Overall, the total index increased 1.1 points to 57.4. Even though this is down 0.6 points from one year ago, it is still 6.7 points higher than May 2013.
Air freight continues to lead the optimism for both the six-month outlook as well as for the present. Sea freight however, remains troublesome for the present and while some ports have settled labour issues, other issues such as the rise of the mega-vessel and larger shipping alliances are straining port operations. Congestion is a big problem for many ports and perhaps air freight is currently benefiting from the misfortune of ports.
Stifel Logisitcs Confidence Index: Total
For the present, favourable currency rates probably helped boost the Europe to Asia and Europe to US trade lanes both noting big gains from April, up 7.0 and 3.0 points respectively (58.2 and 62.7). The only declining trade lane for the month was recorded for Asia to Europe, down 2.0 points to 52.6. The US to Europe lane was up 0.7 points to 48.1 to complete the trade lane list. This marks the second month in a row for contraction along the US to Europe lane, most likely due to the strong US dollar.
By trade lane the outlook is positive for all, with Asia to Europe gaining the most points, 3.5 from the previous month to 67.1. Europe to US gained 3.0 points to 63.8 while Europe to Asia increased 2.5 points to 64.7 and US to Europe up 1.6 points to 56.7.
Stifel Logistics Confidence Index: Air Freight
The present situation for sea freight noted a worrisome decline of 2.6 points to 47.7. This is the first time since October 2013 that the present sea freight sub-index fell below the 50-level. Furthermore, three of the four trade lanes we track are currently below this 50-level, which means contraction. For the tradelanes Europe to Asia and US to Europe, this marks the second consecutive month of contraction. While the Europe to Asia lane actually noted a slight increase, 0.2 points to 47.6, the US to Europe lane declined even further, 5.0 points to 41.5. Meanwhile, Asia to Europe slipped below the 50-level for the first time since October 2013. It fell 4.7 points to 48.9. Europe to US remained the only lane above the 50-level but also declined, 0.9 points to 52.0.
The six-month outlook was a bit more positive with all lanes noting gains. Europe to Asia noted the biggest gain at 3.0 points to 66.2 followed by Europe to US, up 2.7 points to 65.7. Asia to Europe was up 1.9 points to 64.0 and finally US to Europe increased 0.7 points to 4.7. For all lanes, the six-month outlook for sea freight was up 2.1 points to 62.9.
Stifel Logistics Confidence Index: Sea Freight
We asked survey respondents if currency had a meaningful impact on shipments from Europe to the US. A clear majority, 62.4% indicated an impact while 16.5% indicated currency had no impact. The final 21.2% were unsure.
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