The Stifel Logistics Confidence Index continued its downward trend in May as it fell for the second consecutive month.
Compiled by Transport Intelligence, the overall index, which combines the current situation with future expectations, was down 0.8 points from April to 50.7 in May and was 1.3 points lower compared with the same month in 2012. Yet, even with deteriorating confidence, the Logistics Confidence Index registered above the 50 threshold, indicating growth, for the fourth consecutive month.
Lucy Palmer, Economist at Ti, observed, "Air forwarders have continued to express less optimism compared with sea forwarders since the index began in March 2012, an indication of the modal shift from air to sea freight as shippers seek to lower transport costs." However, for the present environment, both sea and air forwarders indicated a minor weakening compared with April.
In terms of sea freight, the index for the logistics situation fell 0.4 points to 47.0 in May from the previous month. Conversely, when compared to last year, the index was 1.1 points higher. Meanwhile, the overall index for air freight fell 0.6 points to 41.4 in May from the previous month and was 3.0 points lower compared with the index the previous year. Lucy Palmer explained, "We might typically expect an improvement in volumes in the second quarter resulting from a seasonal rebound in spring; however the indices do not appear to show any indication of this as yet."
Forwarders were also slightly less positive regarding the six-month outlook compared with last month; the index for logistics expectations fell 1.2 points to 57.2 in May. However, respondents still believe volumes will improve.
In this month's unique question, we asked survey participants whether they believe North Korea presents a tangible threat to Asia Pacific supply chains. Over half of respondents (52%) did not consider North Korea as a danger to Asia's supply chains, while 34% did. The remaining 14% were unsure.
Full results can be viewed here.