Uncertainty hits the Asia Pacific region

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The Asia Pacific transport and logistics market is entering a period of intense uncertainty as the effects of the global economic slowdown start to be felt.

Two sectors are showing particular signs of difficulty. Figures in the new Transport Intelligence report, Asia Pacific Transport & Logistics 2008, reveal that freight forwarding has been one of the most affected sectors, with annual growth having contracted sharply in 2007 from 17.3 per cent the previous year to 12.1 per cent. That fall was due to weakening demand in the North American market as well as falling freight rates caused by over-capacity. The market wasn’t helped by Japan’s stagnating economy.

The Asia Pacific region’s contract logistics market also saw lower levels of growth, albeit experiencing a less pronounced drop than freight forwarding, with a decline from 13 per cent in 2006 to 11.4 per cent in 2007. However, while signs of the slowdown are already being felt, Asia Pacific remains best placed to ride out the economic storm, according to TI chief executive John Manners-Bell.

“The Asia Pacific region has the potential to see out the global economic crisis, although it will not be easy,” says Manners-Bell. “Distributing product across such a contrasting mix of markets presents challenges which are unheard of and little understood in North America and Europe. Congestion at ports, airports and on roads, as well as a variety of barriers to trade, has led to increasing supply chain costs.”

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