Optimism for a global economic
recovery has faded fast during the first half of 2012. Ti’s Global Logistics
Monitor expects the last half of the year to remain stagnant with little if any
uplift in freight demand.
What optimism there was at the beginning of 2012 has now
soured as the first half of the year ends. Asia’s export-driven economy
continues to decline as its major trade partners Europe and the US contend with
economic concerns of their own.
Declines in demand, particularly along the Asian tradelanes,
have resulted in capacity issues for both air and ocean freight providers.
Airlines in particular, hit with high oil prices and
declines in demand have scrambled to readjust capacity to fit the current
demands. The Association of Asia Pacific Airlines (AAPA) reported cargo
movement declined 5.3% during May and year-to-date, cargo is down 5.0%. European air cargo providers also are
reporting lower volumes. For example, air cargo provider Lufthansa reported a
12.3% decline in total cargo and a 12.8% decline along its Asia tradelane.
Ocean freight providers are also removing capacity while
raising rates in an attempt to recoup from losses over the past year or so. However,
ports appear to be holding their own as many have noted positive cargo movement
- but this may be due to shifts away from using airfreight. Also, increases in transshipments appear to
be on the rise particularly in Asia.
North American economies have shown encouraging growth. Both
Mexico and Canada continue to report good manufacturing activity through June –
perhaps due to demands in automobile manufacturing – however, surprisingly, US
manufacturing activity declined in both May and June. In fact, June activity
declined sharply by over 3% sparking concerns for the economy.
Still, US port activity remains good with both imports and
exports remaining strong through May for such ports as Los Angeles, Savannah
and Charleston.
The outlook for the remainder of 2012 is doubtful as the
global economy continues to show signs of increased weakness. On a bright note,
oil prices have declined to below $100 a barrel which should benefit
transportation providers and also there are indications of a positive peak
season based on recent shipper surveys.
Finally, the questionable economic situation seems to be
sparking an increased interest in mergers and acquisitions across all regions
as providers look to consolidate their positions as well as to expand into new
regions and/or services.
