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Zero Hedge

Listening to the iPhone and Alibaba infotainment channel, the name TNT Express has been mentioned exactly zero times today. For those who are unaware, Dutch TNT Express, which UPS tried to acquire in 2012, is one of the world’s largest logistics companies competing with UPS, FDX and DHL. And the reason the name is important this morning, and thus why it is being avoided on this side of the Atlantic, is because earlier today it provided the latest confirmation of Goldman showed previously, namely that the global economy has not only hit a brick wall, but is now in reverse, when it warned that as a result of “weak growth in Europe and the US” it would not meet its overoptimistic full-year targets. The result: its stock plunged by 11%. And since global logistics and trade, or lack thereof, is universal, expect FedEx and UPS to follow shortly with guidance cuts of their own in the coming days and weeks.

From Expatica:

TNT Express shares slumped almost 11 percent on Wednesday after the Dutch courier company warned it is unlikely to meet its full-year targets due to weak growth in Europe and the US.

 

TNT said it was “no longer prudent to maintain our 2015 guidance — which assumed an economic growth rate in Europe of between 2 and 3 percent — of an adjusted operating margin of 8 percent” for Europe and the Americas.

 

The news sent its shares tumbling 10.5 percent to 5.03 euros on the Amsterdam stock exchange.

 

TNT also warned it was making a provision of 50 million euros ($64 million) to pay a fine resulting from a French probe into alleged anti-competitive behaviour.
Concerns have been mounting about weak economic growth in the EU, with a key survey on Tuesday showing business activity in the 18-nation eurozone slowed this month.

 

“Overall trading conditions in Europe have deteriorated further and competitive pressures have increased,” the company said in a statement.

 

TNT said in July it was under investigation by the French Competition Authorities (FCA) and that it had cooperated with the probe involving several French and foreign delivery companies since it began in 2010.

 

“TNT is now entering into a settlement with the FCA with respect to the investigation of alleged anti-competitive behaviour in the French parcels delivery sector,” the courier said.

 

The size of the fine is not expected to be known before the end of 2015 and so TNT “will be making a financial provision of 50 million euros in the third quarter”.

 

TNT Express operates in more than 200 countries and maintains a leading role in the road freight network in Europe. It currently employs some 65,000 people.

Surprised? Don’t be. Remember: in the New Abnormal central banks can print everything except trade, which is why yesterday the WTO cut its global trade forecast once again, saying trade in goods will grow by 3.1% this year, much less than the 4.7% the WTO forecast in April. It cited “weaker-than expected GDP growth and muted import demand in the first half,” according to a statement. The WTO did the usual hockeysticking for 2015, when it said trade was likely to grow 4.0% in 2015 rather than the 5.3% expected previously, still far below the 20-year average of 5.2%. The excuse, aside from snow in the winter of course, “risks abound in the form of geopolitical tensions, regional conflict and health crises (Ebola)”.

Sure enough, Ukraine and Ebola are now the global scapegoats for yet another year of central planning gone wrong: just as we said they would be over 3 months ago.

Finally, keep an eye on Trade, because it really is the most important indicator of what is truly happening with the global economy. It was in April 2013 when we presented “The Most Disturbing Chart From Today’s IMF Outlook Revision“, showing the collapsing sequential revisions of global trade.

Until such time as trade actually does pick up, there can be no reasonable hope of any regional or global economic growth.

Zero Hedge

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