Despite improved results in January and February, the March edition of the Stifel Logistics Confidence Index suggests that these months may have merely amounted to positive blips within a downward trend.
The release of February trade volume figures for China showed that the country has experienced significant declines in both imports and exports, with the latter contracting 25.4% year on year; the steepest decline since May 2009.
At the beginning of March, Alphaliner reported that the global fleet of idle container ships reached a six-year high, demonstrating the lengths to which carriers are being forced to go in order to cull capacity. This news came as question marks were raised over the feasibility of increases in the size of container vessels.
Research by Drewry found that increasing the size of ships to a capacity of 24,000 TEU would have a net negative effect upon the industry, requiring significant infrastructure investments at ports and the Suez Canal. The largest containerships at present are Mediterranean Shipping Company’s 19,224 TEU Oscar-class vessels, which were introduced in 2015. In the words of Drewry’s managing director, “The terminal costs go up and they offset the savings that the shipping lines make.”
In air freight, IATA released statistics for January showing that monthly demand had risen by 2.7%, though available capacity increased by 7%, resulting in a 1.8% contraction in average load factors. The head of the organisation said: “It is good news that volumes are growing, but yields and revenues are still under tremendous pressure.”
A story of particular significance with regards to air freight was Amazon’s confirmation of a rumoured air cargo venture. The company will lease 20 Boeing 767 jets from Air Transportation Services Group on contracts of five to seven years, and as part of the deal, has an option to acquire 19.9% of ATSG’s shares at a set price during the next five years.