New report suggests an uptick for forwarders

Demand, capacity and profitability have all shown huge unpredictability both in the air and sea freight sectors, said analysts, yet it is confidence -- or rather the lack of it -- which has set the overall tone.
By Patrick Burnson, Executive Editor
August 24, 2010 - LM Editorial

The global trading system is experiencing “extraordinary volatility” and this is being reflected in the performance of the freight forwarding industry, said Jon Manners-Bell of Transport Intelligence (Ti), a London-based think tank. Demand, capacity and profitability have all shown huge unpredictability both in the air and sea freight sectors, he said, yet it is confidence—or rather the lack of it—which has set the overall tone.

“In some respects the past twelve months have been a good time for the sector with demand recovering at a remarkable rate in a number of key routes,” he noted in a recent report.  “The crash in volumes experienced in 2008 and early 2009 appeared to herald a long term slump in global trade and logistics. However this slump has not occurred. Rather the reverse.”

Ti’s latest research indicates that despite the lack of capacity for both air cargo and ocean freight shippers, may well continue to the central problem, however.

According Manners-Bell, the sector was caught in the “perfect storm” of falling volumes and rates.

“Having benefited for so long from the growth of global supply chains, it now found itself in free fall as Western retailers and manufacturers were left with excess inventory in their warehouses,” he said. “This resulted in the suspension of orders to predominantly suppliers many of whom are based in Asia. The timing of this reaction could not have been worse.”

Indeed, he observed that with shipping lines and airlines still increasing their capacity, over capacity became rife on all major lanes and rates dropped dramatically. The result, said Ti analysts, was that the slowdown in 2008 became a slump in 2009 (the market fell by 23.4 percent) although by the end of the year the market was showing signs of upturn.



About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA