Two reports out today provide an interesting contrast to the strongly positive growth in air freight demand in April.
Denmark-based Danske Bank regularly polls European forwarders to determine how monthly air and seafreight volumes compare with previous months, and also to see what the forwarders expect for the next two months. For April air freight, the Danske Bank Index stood at 53, down from 65 in March. Since an Index reading above 50 means positive growth, the forwarders were saying that while air freight volumes did grow in April, the growth was not as strong as it was in March. Looking ahead to May and June, the forwarders’ confidence level dropped to 47, indicating an expectation that there would be a slight decline in volumes. For ocean and road volumes, the forwarders saw continued growth, though at slightly lower levels.
We point out that the Danske Bank Index measures forwarders’ expectations for month-over-month growth or decline, rather than year-over-year, so it is probably wise to be cautious about reading too much into it.
In the US, Wolfe Research, a financial analyst specializing in the transportation sector, reported that shippers surveyed in March and April about their expectations for the next twelve months were strongly positive. The shippers surveyed said they expected rail and intermodal volumes each to increase 5%, while ocean and domestic road volumes would rise 3% to 4%, with growth increasing as the year wore on. However, the good news for these surface modes comes at the expense of air freight, as almost 40% of the shippers surveyed said they planned to shift some of their international volume from air to ocean.
Again, we urge caution in interpreting the results. These are surveys of people’s feelings about, and expectations for the future, not measurements of physical reality. Still, if taken at face value, they indicate that the 6.0% year-over-year growth in demand for airfreight seen in March (and likely in April) will probably fall somewhat as the year progresses.
We shall see.