Logistics giant projects ‘very, very weak’ peak as customers scale back orders

Slowing orders from shippers this fall, particularly for Asia-to-Europe goods, are signaling a “very, very weak” peak shipping season, according to global supply chain operator CEVA Logistics.

CEVA officials said the slowdown was less pronounced on business from Asia to North America but orders still are scaling back from earlier, more optimistic forecasts.

“The normal end of year peak season is going to be very, very weak this year," said John Patullo, CEO of Netherlands-based CEVA Logistics. “There has been a slowdown across several lanes, particularly Asia to Europe. There has been a marked slowdown in shipment levels. That would indicate that there has been a slowdown in consumption.”

The slowdown follows growth this year that has brought shipping volume “back to levels of 2008, whatever metrics you use. But rates of growth have very clearly slowed, and some freight routes have slowed dramatically,” Patullo said at the annual meeting in San Diego of the Council of Supply Chain Management Professionals.

“For 2011, it becomes something of a lottery, and as a Scot, I am prone to have a gloom and doom view,” he said.

CEVA executives said the slowdown has been less pronounced on U.S.-bound demand, but there is a clear pullback. “About 120 days ago, customers had some pretty robust forecasts. Those same customers have softened those forecasts,” said Matt Ryan, president of CEVA Americas.

“Inventory stocks have been replenished and right now, with so much uncertainty out there, it looks like shippers would rather have to ramp up their business than face the risk of cutting back,” Ryan said.

Source: JOC