The Stifel Logistics Situation Index showed an easing in demand in August, resulting in a decline of 1.8 points to a mark of 51.3. However, the current situation in sea freight saw gains over July’s score, and was significant in arresting the pace of decline, providing a bright spot in a month that paints a concerning picture overall, according to analysts at the advisory firm Transport Intelligence.
A 0.5 point rise in the Logistics Situation Index for sea freight provided a positive note in August as three of the four lanes examined recorded growth, Transport Intelligence said.
Leading the way was the Asia to Europe lane which rose 3.4 points to 56.4. There were similarly positive signs on the U.S. to Europe lane which gained 3.0 points, but at 47.8 conditions undoubtedly remain challenging.
The Europe to Asia lane added 0.9 points to reach 51.0 and a second consecutive month above the neutral 50 mark.
Weighing heavily on the present situation, however, was the Europe to U.S. lane which declined sharply, falling 5.4 points to 48.5 and indicating a contraction for the first time since March 2014.
The strength of the U.S. dollar saw exports from North Europe to North America grow by 8.4% over the first five months of 2015, but significant capacity increases on the lane during that period are threatening to outstrip demand.
August’s familiar pattern of across the board declines returned in the Logistics Expectation Index for sea freight as 2.7 points were lost and a score of 56.4 recorded.
Overcapacity on the Europe to U.S. lane appears to be a concern over the remaining months of 2015 as a fall of 3.4 points saw the index for the lane decline to 58.1.
Following a fall of 3.3 points, the Asia to Europe lane also saw a score of 58.1 recorded for August. The U.S. to Europe lane fell 3.0 points to 51.1 points, while a fall of 1.1 points meant the Europe to Asia lane finished August at 57.8.