Transport and logistics industry remains in the grip of a slowing global economy

Transport and logistics industry remains in the grip of a slowing global economy

For the month of September, the global economy maintained its firm grip on the transport and logistics market. Little change occurred in the major regions – Europe’s debt crisis persists, Asian exports continue to decline and the US witnessed little growth. All of this will likely continue through the end of the year and probably into 2013. Until then, transport and logistics providers will endure the likelihood of continued falls in freight due to declining demand.

Little relief is expected for the remainder of the year, although a few positive bumps are expected such as the launch of new high-tech products from Apple, Samsung and others and perhaps a slight uptick during the holiday season if consumers decide to spend.

Airfreight providers remain in a precarious situation. Several providers including FedEx, Uti Worldwide and UPS, noted a “trade down” from air to ocean freight services. As such, capacity is being adjusted to match this shift. Still, even ocean freight appears to be on a decline as noted by numerous ports in Asia, Europe and even the US. Are we moving toward regional trade or is this in fact due to the economic malaise the world has been experiencing? If in fact regional trade is on the upswing, it is hard to tell due to the mixed data.

For intra-Europe, volumes declined for the first half of this year, whereas cross-border US-Canada-Mexico (NAFTA) has remained fairly strong and trucking and domestic intermodal transport continues to be positive for the year. As September represents the end of the third quarter, transport and logistics providers will begin reporting earnings later in October. Based on two disappointing recent earnings reports by FedEx and Uti Worldwide, it is likely that many providers will follow suite and report similar earnings.