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Logistics Market Faces Uncertain Future

Transport Intelligence says industry may not benefit from improving economy. UK research firm posits three potential scenarios.

By John McCloud | Updated on September 16, 2009

BRINKWORTH, UK-Despite recent improvement in the global economic situation, the international logistics market may face further deterioration, claims a leading logistics researcher. The outcome could significantly reduce the number of tenants competing for logistics space.

“To a large degree the logistics industry’s future is very much at the mercy of the administrators and bankers who brought about the present economic crisis,” explains John Manners Bell, CEO of Transport Intelligence (TI), a UK-based logistics research and analysis firm. “If they are able to navigate the global economy out of the present recession without making things worse, carriers and forwarders can probably look forward to [a period that is] difficult but manageable. However, a meltdown cannot totally be ruled out.”

According to Bell, to this point the market has reacted the way classical transport market economics theory predicts, with rates in freefall as freight capacity outstrips demand, hurting carriers but allowing freight forwarders take a larger slice of a diminishing pie. But he says enough capacity has now been removed to allow carriers to gradually increase rates, and from this point forward, the future is less predictable.

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