The American Consumer and Logistics

August 17, 2007 by Splatty  
Filed under Misc Logistics

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Transport Intelligence has an excellent article on the importance of the American consumer to global logistics sector. With the recent downturn in the U.S. financial markets, the article details the importance of a healthy financial economy to the continued growth of logistics services worldwide. While I do not have a “the sky is falling” outlook on the U.S. economy and think that we are merely in for a needed correction, I do believe that one must take a cautious outlook with the economy’s current state.

So if there is a deterioration in the American economy what are the effects on the world’s logistics sector likely to be? One salient problem areas would be in shipping. Most container shipping lines are committed to big programmes of ‘new-build’. If growth in demand in key routes slows or even halts, there will be a capacity over-shoot and a consequent collapse in rates and profits. To a lesser extent similar effects will be seen in areas such as port infrastructure, which has seen so much investment recently, airfreight capacity and even rail services. Road freight in the U.S. has already felt the squeeze of lower consumer spending, but now this might spread to affect the acquisitive ambitions of the big European logistics companies.

Read the entire article here.

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