The global freight forwarding market and its impact on globalisation
Supply chain guru Mark Millar has written a white paper, much of it based on Transport Intelligence research, looking at the freight forwarding industry. It touches on key trends, including the increased move towards regional supply chains, and the consequences thereof – in this case, the decreasing speed advantage of air over ocean in shorter chains, and the likelihood of more frequent but shorter journeys and more domestic freight moves. Mr Millar also considers the freight forwarding industry itself: a $150bn business, of which 44% is accounted for by the top 20, led by DHL with a 7.9% market share, with CEVA coming in at 20th with a 2.3% share. Tier 2 forwarding companies account for some 16% of the market, leaving the remaining 40% – worth $57bn – to other forwarders. An interesting abbreviated read of Ti’s data.The global freight forwarding market has experienced considerable volatility in recent years, resulting from a range of factors including slow economic growth, supply-demand
imbalances, oil price fluctuations, shorter supply chains, modal shifts and rate pressures.
According to leading industry market research firm Ti (Transport Intelligence), the total value (revenue) of the global freight forwarding market in 2016 was USD 141.9 billion, reflecting
year-on-year growth of 2.7%, with cargo volume growth estimated at 2.6%. Their forward outlook is rather more optimistic, with a forecast 2016-2020 compound annual growth
rate (CAGR) of 4.1%, resulting in total market size of over USD 166billion in the year 2020.
whilst being a vast market (150 billion dollars) with healthy growth (CaGr 4.1%), the global forwarding sector is experiencing structural change resulting from recent
developments in globalisation, including anaemic economic growth, some resistance to free trade, and a trend towards more regional supply chains.
Outside the top twenty global providers, global forwarding represents a USd 57 billion market opportunity for freight forwarders of all shapes and sizes.
For the SMb (small and medium-sized business) forwarders,their inherent agility, flexibility and customer service focus will continue to differentiate them from the
global giants; whilst their asset-light business models that thrive on knowledge and networks will remain a key source of competitive advantage.