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11
Sep
2017
Top 25 Freight Forwarders 2017: Digitization & E-Commerce continue to reshape the marketplace

Top 25 Freight Forwarders 2017: Digitization & E-Commerce continue to reshape the marketplace

11 Sep 2017

Over the course of 2016, real revenue and volume growth in the air and sea freight forwarding markets was remarkably similar globally, but this disguises significant differences across important countries and regions, say analysts who keep a close eye on the market.

For example, airfreight forwarding growth in China is thought to have been robust this past year, while sea freight growth was much weaker. Conversely, the United States saw moderate expansion in sea freight as air cargo growth faltered over the same period.

Looking ahead to the next 12 months, the market is anticipated to grow at a real compound annual growth rate of 4.1%, as global trade volume growth accelerates. Meanwhile, logistics managers moving freight globally should plan their budgets accordingly.

According to the new “Global Freight Forwarding 2017 Report” compiled by the London-based think tank Transport Intelligence (Ti), a continuation of excess capacity issues and lower average oil prices in 2016 led rates to fall in both air and sea freight, meaning most forwarders reported lower year-on-year revenues.

On profitability performance, survey results indicate that excluding the impact of volume and rate changes, margin pressures for forwarders will intensify over the next five years. Indeed, researchers feel that with investment in technology and offering new or more value-added services, middlemen will develop more successful strategies to sustain margins. In addition, it appears that conventional forwarders are set to lose volume share to other parties like smaller, more technologically savvy 3PLs, but the threat may be “asymmetrical” for air and sea.

A deep dive into the world of freight forwarding technology reveals the disruption caused by digitization, changes to the competitive landscape, and, ultimately, whether forwarders can adapt and survive the upheaval being caused by the continued evolution of the digital supply chain.

“The research we’ve conducted indicates that there’s substantial demand for online interfaces that allow forwarders to better serve shippers,” says Ti analyst Alex Le Roy. “Nonetheless, it’s clear that the scope of these solutions, in terms of geographic coverage for example, needs to broaden in order for them to deliver value. This will occur, but we are now bearing witness to a race for scale amongst the start-ups.”

Source: Logistics Management


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