Global freight forwarding companies are seeking change, as they are compelled to transform themselves from within. This is with relevance to the rapid growth in 2017, as seen in the global freight forwarding market. The market grew by 8.0% in 2017, and in comparison, to other years, it is considered a rapid expansion compared with recent years and the biggest annual gain since 2010.
The forwarding market and its largest players are embracing technology as they seek to transform their operations from within the entry of ‘tech forwarders’ – including digital forwarders and spot market platforms – has driven the largest forwarders to enhance their own technology usage and the capabilities they offer to shippers.
Customer-centricity is at the top of the agenda as the world’s largest freight forwarders look to drive efficiency and establish new routes to market.
At 8.0% the global freight forwarding market grew at its quickest annual pace since 2010. This was driven by strong growth in both air and sea freight which both saw year-on-year increases, while forecasts reveal that sea freight is positioned to continue healthy growth over the short- to medium-term.
Perhaps more than ever, freight forwarding stands at a crossroads with forwarders large and small facing significant challenges and threats in a market characterized by strong growth and abundant opportunity.
Meeting the challenges and overcoming the threats requires forwarders embrace technology, drive scale and efficiency in their operations, and truly put shippers at the centre of their operations. These same drivers are also the clearest route forwarders have to capitalizing on the opportunities in today’s market. As such, Global Freight Forwarding 2018 examines in detail the strategies and technologies the world’s largest forwarders are using to position themselves for the future.
“At its core, forwarding remains a process of buying space and securing volumes, of ensuring goods reach destination on time and in good condition, and of building trust and lasting customer relationships. In 2018, we see and hear so much about logistics service providers moving to embrace advanced technologies like artificial intelligence and blockchain, it’s easy to miss that many of the world’s largest forwarders are renewing their focus on core activities and achieving higher service levels. After being caught unaware by the entry of a new breed of tech-enabled forwarders into the market, the traditional players have come to see technology as a force magnifier in value creation, but not as the centre of their offer,” said Nick Bailey, Head of Research at Transport Intelligence.
Alongside Ti’s Global Freight Forwarding market sizing, which for the first time includes 5-year compound annual growth rates (CAGRs) for the 2017-2022 period, is an in-depth analysis of the opportunities SMEs offer forwarders. It has long been an ambition of many of the world’s largest air and ocean forwarders to win additional business from SMEs.
And with the widespread rollout of online freight quotation and booking platforms, there has been a renewed forwarder focus on SMEs.
“At present, SME business for forwarders is typically higher margin than that of large shippers. Interviews with senior forwarding sector stakeholders revealed that the enhanced price transparency of SME-targeting online rate quotation and booking platforms is having a negative effect on gross profit margins. However, lower process costs associated with a slicker front-end and greater automation of back-end processes mean there are cost savings to be realised. The extent to which these are achieved will be a key battleground for forwarders targeting SME business,” said David Buckby, Economist at Transport Intelligence.
