The strength of world trade created a positive 2011 for some regions in global logistics, with modest growth, but there are now signs of falling demand, according to an analysis.
"The second wave of macroeconomic pain is likely to exact a heavier toll than the first," said a report, adding that the shipping sector faced the maximum risk.
The report further stated that there was considerable probability that the sea freight sector would undergo systemic restructuring, with 2012 seeing the effects of the drop in both bulk and container sectors that happened two quarters ago.
"Unless there is a rebound of the magnitude seen in late 2009, the sector will probably see a rationalisation of remarkable aggression. Possibly, the container shipping sector will begin to consolidate into just a few giant firms with pricing power to match. Up until then, freight forwarders are likely to profit from rock bottom rates," the report said.
The airfreight sector, on the other hand, showed less vulnerability. Volumes of trade out of the once solid Asia-Pacific market have dropped, as the sector is likely to be restructured in dedicated freight airlines.
Contract logistics is not expected to experience a volume crash, with the auto industry continuing to grow, sustained by strong exports from Europe. However, prospects for individual logistics service providers are less certain, as a large number of these fail to cover their costs of capital, indicating a possible wave of mergers and acquisitions. |
