SINGAPORE’S logistics sector posted a slower expansion in November 2024, dragged down by business volumes, transportation and warehousing.
The Singapore Logistics Growth Index (LGI) slid by 0.3 point to 51.9 points in November, from 52.2 points the month before. This is the 51st straight month that the sector has expanded since August 2020, when the LGI recorded 49.3 points.
The index is published by the Logistics Institute of Singapore and is based on data compiled from surveying logistics professionals and senior management in over 1,000 companies.
The business volume index dropped by 0.7 point to 52.7 points in November; the transportation index fell by 0.5 point to 53.3 points; while the warehousing index edged down slightly by 0.2 point to 50.3 points.
Slower expansion rates were also recorded for the indexes of business sentiment, transport capacity, logistics cost, warehouse capacity and goods for sale.
Of all indexes, the logistics cost index saw the biggest decline from the month before, dropping by 1.1 points to 53.6 points in November. Still, this was the 40th consecutive month it remained expansionary.
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Similarly, the business sentiment index continued its expansionary streak for 20 straight months, even as it dropped by 0.9 point to 53.2 points in November.
On the other hand, faster expansion rates were recorded for the indexes of employment and inventory.
The employment index rose by 0.3 point to stand at 50.7 points in November, while the inventory index inched up by 0.1 point to stand at 50.9 points.
Expansionary mode
Logistics growth for the overall Asia-Pacific region saw a faster pickup in November.
The Asia Pacific LGI edged up 0.1 point to post a slightly faster expansion of 51.8 points, marking the 50th straight month it remained in expansionary mode.
The latest reading was attributed to a faster expansion rate in business volume, transportation and warehousing. On the other hand, the employment index posted a slower expansion rate while the inventory index posted a slower contraction.
The indexes of business sentiment, transport capacity, logistics cost and warehouse capacity also expanded for the month of November, though the goods for sale index posted a faster contraction.
Stephen Poh, director-general of the Logistics Institute of Singapore, said that logistics activity in the Asia-Pacific region continues to be driven by technological innovation, amid “higher logistic costs arising from costly measures to mitigate geopolitical and macroeconomic risks”.
He noted that demand for air and ocean freight continues to grow across major markets, even as the ongoing Red Sea crisis shows no sign of abating. The crisis has disrupted global shipping routes and supply chains since it began in October 2023.
Container ports in the region, such as Singapore and Klang, have continued to face congestion, as ships divert around the Cape of Good Hope to avoid Houthi attacks in the Red Sea.
According to reports, shipping lines have had to wait for one to two days to berth in the Republic over the last few months, up from – at most – within half a day previously.
