The bad news is that there is no immediate end to the malaise. The good news is that if our annual global projections are accurate, the market will show steady, albeit uneven, growth as we move through the balance of 2002 and beyond. In addition, airfreight will continue to grow at the expense of ocean freight.

For more than five years, The Colography Group has issued an annual forecast of global trends for air and ocean services. The report projects import and export trends within and between nine world regions, and analyzes shipping activity by tonnage and value.

Below are some of our projections for the balance of 2002, which we believe, barring any unforeseen calamity like the September 11 terrorist attacks, will influence global shipping patterns through the coming year:

When all is said and done, the weight of goods shipped worldwide in 2002 will rise by 3.7% over year-earlier figures. Global vessel tonnage will grow by 3.7% to 9.19 trillion pounds, a growth rate equal to the overall market. Air tonnage, while a tiny piece of the overall tonnage pie at 52.8 billion pounds, will still grow by 4.2% over 2001 levels. While the overall growth rate slides below that of the boom years of the latter half of the 1990s, it certainly doesn’t indicate a global economy that is going in the tank.

The value of goods shipped worldwide will rise to USD5.7 trillion in 2002 from USD5.4 trillion in 2001. Airfreight will control 42.4% of that value, up from 41.6% in 2001. Interestingly, the value of goods shipped by air will grow by 6.9%, far exceeding the total market growth of 4.8%. This indicates that the goods being shipped by air are more valuable and expensive than ever before.

The percentage of all-mode global tonnage moving by air will stay at 0.57% in 2002, flat over 2001 levels. Yet it is .03% above the figures reported in 1995. This is a secular trend that shows no signs of abating. On the surface, such a small uptick would seem to be of little consequence. When one considers, however, that 9.2 trillion pounds will be shipped globally this year (up from nearly 8 trillion in 1995) those “small” gains by air are actually enormous strides.

More than 25% of 2002 all-mode global tonnage will be exported from Western Europe, far more than any other region. North America will be second with 12.4%.

A rising tide of increased global trade will not lift all boats. For example, the growth rate of Asian all-mode tonnage will surge by nearly 12%, while the growth rate of Eastern European all-mode tonnage will jump by 6%. By contrast, the growth of Western European all-mode tonnage will be fortunate to exceed 1%, and North American all-mode tonnage will rise by a paltry 1.1%.

Our projections for global air export tonnage illustrate this disparity. Asian air export tonnage will grow by 8.4%, trailing only the relatively immature regions of Africa, the Middle East and Eastern Europe. North America will experience a 5% growth in air tonnage, while Western Europe will check in at a paltry 0.1% growth rate.

Its market status notwithstanding, Eastern Europe may be the most interesting region to watch in coming years. For example, we project that Eastern Europe will post an 18.3% gain in air export value this year, surpassing every other world region. On the air import side, Eastern Europe will register the fastest growth (nearly 4.3%) of all regions in value per pound.

Much has been made of the growing importance of intra-regional shipping patterns, especially in airfreight. Yet our 2002 survey reveals a surprising decline in the percentage of global air tonnage and value shipped intra-regionally. We project that 44% of air global tonnage and 45.4% of global air value will move within the respective nine regions. That is down from 45.2% and 46.6%, respectively, for 2001. Even Asia, which has long been the bellwether for intra-regional airfreight growth, will report a year-over-year decline, albeit a modest one.

How do we explain these numbers? One assumption is that, in many regions, more intra-regional shipments are moving via surface transport as cost-conscious businesses turn to economical trucking services to move goods from either factory or warehouse to the consignee.

This is a broader trend that bears watching on a global scale. Since the late 1980s, many companies bought into the notion that the intercontinental, low-inventory model was the only way to manage a supply chain, and that premium-priced airfreight was the only mode to bring goods to market.

Events of the last 14 months, however, may have altered the landscape. The 9/11 attacks, a devastating typhoon in Taiwan at about the same time, and the recent shutdown of all U.S. West Coast ports is forcing many businesses to take another look at their inventory management strategies.

We believe that total reliance on the low-inventory model will give way to a balanced approach wherein businesses build judicious amounts of safety stock and ramp up their investments in warehouses so that they can avoid being caught without product should another unforeseen event disrupt the supply chain.

This doesn’t mean the low-inventory approach will be abandoned. As we illustrated earlier, the value of goods moving by air is richer than ever before. Those goods cannot afford to rest in inventory. They must be kept in motion and moved to market as fast as possible. For that, there is only one mode.

Going forward, air’s greatest competitor will not be ocean. As global products become smaller and more valuable, the enormous time-to-market differential between the two modes will convince the marketplace that air is the way to go.

The most formidable challenge to air will come from the shippers and consignees. Should more businesses decide to build safety stocks of inventory and create intra-regional warehouses in which to keep that inventory, it stands to reason that most of those goods, moving over relatively short distances, will move via surface transport.

Our conclusions? The global shipping market will face short-term headwinds, but should show steady though uneven growth through 2003. Asia will remain robust; Eastern Europe will gain momentum, while North America and Western Europe will remain flat. Airfreight will continue to take share from ocean freight, but will face a major challenge from surface transport as shippers alter their inventory strategies.