Wednesday, January 24, 2018

"Global trade expansion to slow in first quarter of 2018, DHL forecasts"

From DC Velocity:

DHL/Accenture index predicts changes in volume of cross-border trade in air and ocean containers.
The volume of containerized international trade will expand for the next three months, although the growth rate may level off due to moderate slowdowns in China and Japan, according to a new forecast released today by German transport and logistics giant Deutsche Post DHL Group.

The first-ever "Global Trade Barometer," produced for DHL by consultancy Accenture, reported a combined global index value of 64 for January, down slightly from the December 2017 value of 66 but well above the threshold value of 50, which indicates traffic growth. Numbers below 50 would forecast a decline in world trade.

The study predicted a similar trend for U.S. trade flows, which it forecast to expand in January with an index value of 64, the same as December 2017 but down slightly from a level 66 in November 2017. The report combines import and export customs data from 70 countries to predict trends in air and ocean trade for seven industrialized nations, one of them being the U.S. The report forecasts broad trends of expansion or contraction on certain trade lanes. It does not forecast specific targets for the number of containers expected to ship.

"We are doing this because it gives us new insights into the market so we can provide better transparency and predictability for our customers in a world which is often a bit volatile," Tim Scharwath, CEO of DHL Global Forwarding, Freight, said at a press briefing today in New York. DHL plans to release the index four times per year.

Predicting changes in freight volume could allow both DHL and its customers to adjust to economic trends earlier than was previously possible, then save money by adjusting before their competitors can act, he said. DHL recently took advantage of that capability while testing a developmental version of the index.

"Seeing a predicted rise in air freight in China gave us the opportunity to buy capacity earlier, instead of waiting until later when we would have had to pay a premium for it," Scharwath said.

The index is produced for DHL by the consulting firm Accenture, which calculated the predictions by tracking the flow of consumer-product components known as "early-cycle commodities," such as shirt labels, smartphone screens, or car bumpers, Scott Davidson, a managing director with Accenture's Seabury Consulting division, said at the press conference....MORE