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PROGNOSIS * UK - Logistics industry will feel the impact of banking sector chaos
At first glance, the collapse of major US-based global investment banks on Wall Street might seem to have very little to do with the logistics business... But Wall Street is at the heart of the global economy
London,UK -Transport Intelligence -16 Sep 2008: -- ... The most immediate effect must be a continuing re-assessment of the pattern of global economic activity and related requirements for logistics services. There has already been a clear downturn of demand in air, sea and road freight since the end of last year. Further job losses and caution in the banking system can only have a dampening effect in the US and many other parts of the world... In the long-term, the implications for consumer demand in the US must be serious. The US taxpayer has assumed vast liabilities over the past month, liabilities which will depress both government and consumer spending... If the Japanese Yen and the Chinese Renminbi finally rise substantially against the dollar and even the euro, that is likely to further support the reversal of the pattern of freight growth seen over the past decade... It is also quite possible that the financial crunch will affect merger and acquisition activities in the logistics sector... Such a scenario might, for example, influence the fate of European global express giant TNT in terms of any recently-rumoured possible takeover by FedEx or UPS; could it also affect the future of up-for-sale German container shipping operator Hapag-Lloyd?... However, there is one positive effect of the deepening global economic woes on the transport sector − its impact on oil prices. Those have already fallen to below $100 a barrel amidst lower economic growth and worsening general sentiment worldwide. That trend is likely to massage profits across the transport sector...
posted by Unknown @ 5:00 PM
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