Global Freight Forwarding

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The Global Freight Forwarding 2017 report contains more than a decade of market size and forecast data, profiles of the largest forwarders, trade lane analysis, an examination of the technology disrupting freight forwarding and the view from the industry thanks to Ti’s freight forwarding survey. This is all put into context by the introductory chapter: the past, present and future of freight forwarding.

Contact Charlie Holden with any queries cholden@ti-insight.com or call on +44 (0) 1666 519907.

This report contains:

  • Extensive market size and forecasting data and analysis
  • SWOT analyses of the largest freight forwarders
  • Commentary around technological developments in freight forwarding
  • A review of the historical trends shaping the future of the industry.

This report contains:

  • Extensive market size and forecasting data and analysis
  • SWOT analyses of the largest freight forwarders
  • Commentary around technological developments in freight forwarding
  • A review of the historical trends shaping the future of the industry.

Exclusive highlights on technology in the freight forwarding industry

  • The majority of start-up companies are looking to serve sector incumbents, but the more ambitious could potentially disrupt the industry
  • Several freight forwarding quotation and booking platforms are providing an increasingly compelling service
  • A profitability divide has already arisen between the companies investing in technology and those which are not
  • Artificial Intelligence will widen this divide

Exclusive highlights on Ti’s freight forwarding market size and forecasts

  • The global freight forwarding market is estimated to have grown by 2.7% in real terms in 2016.
  • Both air and sea markets experienced higher growth than in 2015.
  • The North American air freight market experienced flat growth in 2016.
  • Sub-Saharan Africa is expected to grow faster than any other region between 2016 and 2020.
  1. The past, present and future of freight forwarding
    1. Globalisation and trade patterns
    2. Volume growth
    3. Rate growth
    4. Profitability
    5. Competitive landscape and consolidation
    6. Technology
    7. Complexity
  2. The Global Freight Forwarding 2017 survey
    1. View from the industry on key issues facing freight forwarding
  3. Technology and freight forwarding
    1. Why is digitisation so important for freight forwarding?
    2. Which technologies are changing the industry?
    3. Spot market platforms in practice
    4. Why forwarders will adapt to technology and survive
  4. Vertical sector trade flows
    1. Regional trade flows by vertical sector
    2. Top 50 country-to-country trade lanes by vertical sector
  5. Market sizing and forecasts
    1. Largest forwarders by revenue and volume, by air and sea
    2. Market sizing, growth rates and forecasts (air, sea and total) of 89 countries, 7 regions and the world
    3. Market analysis and commentary
  6. Profiles of the largest freight forwarders
    1. Strategic background
    2. Strategic outlook
    3. SWOT analysis
    4. Financial data
    5. Operational data
  7. Appendix
    1. All market sizing and trade data in one place

 

 
David Buckby

Having obtained a Masters in Economics David is now Ti’s resident Economist. David manages one of Ti’s core strengths, that of quantitative analysis of a range of logistics markets, including sizing and forecasting. David contributes to the GSCi portal, Ti Reports and consultancy projects.

 

As a graduate in International Relations, Alexander Le Roy brings a variety of knowledge and interest to his role as an Analyst at Ti.

Alexander joined the Ti research department in 2013. Since joining the company, he has contributed to 9 top selling Ti reports, in addition to the Global Supply Chain Intelligence portal. The breadth of his analysis includes content on logistics providers, logistics markets and supply chain software. Alexander has developed a significant body of work in the evaluation of log-tech start-ups, and holds a keen interest in the latest technological developments in the industry.

 

Violeta Keckarovska is a research analyst with vast experience in the design, implementation and analysis of electronic and person-to-person surveys. Having worked across a number of sectors, including retail, luxury goods and FMCG, Violeta is experienced in gaining valuable insights across brand perception, voice of customer and strategic re-positioning intelligence campaigns for B-to-B and B-to-C clients.

As a member of the Market Research Society, Violeta brings best practice in research, insight and analytics across Ti.

 

Andy Ralls is a quantitative analyst at Ti. He graduated from the University of Southampton with a Mathematics with Finance degree in 2014. In his studies, he chose a final year project on actuarial modelling and forecasting and enjoyed modules on statistical distribution theory, financial mathematics and macroeconomics.

Andy has since worked for a top accountancy firm and for a wealth management company. These experiences give him a strong understanding of company accounts and investment products and has given him a wider understanding of the financial sector.

  • The global freight forwarding market is estimated to have grown by 2.7% in real terms (excluding the impact of price and currency movements) in 2016. However, collapsing air and sea freight rates have seen revenues for most forwarders fall significantly.
  • Sub-Saharan Africa is expected to grow faster in real terms than any other region between 2016 and 2020.
  • The top three air and sea freight lanes offering the best prospects for volume growth in the next five years will originate in Asia, according to the Global Freight Forwarding Survey 2017, conducted by Ti.
  • Supply chain professionals acknowledge the threat of losing volume share to other parties such as carriers, tech start-ups, Amazon etc. over the next five years. A greater proportion of respondents expect this to occur in air freight than sea freight.
  • Freight forwarders continued to adapt their strategies and product solutions during 2016 to cope with the competitive pressures and market forces. Their strategies are being increasingly shaped by consumers’ demand for real-time information and visibility, urging forwarders to step up their investment in technology in order not to get left behind.
  • Excluding the impact of volume and rate changes, a majority of survey respondents see margin pressures in freight forwarding intensifying. 30% said they would remain about the same.
  • The majority of start-up companies are looking to serve sector incumbents, but the more ambitious could potentially disrupt the industry.
  • Several freight forwarding quotation and booking platforms are providing an increasingly compelling service.
  • A majority of those freight forwarders to have trialled online quotation and booking services have adopted them for official usage.
  • A profitability divide has already arisen between the companies investing in technology and those which are not. Artificial Intelligence will widen this divide.

Global Freight Forwarding 2017 finds that the market grew by 2.7% in real terms in 2016, but stronger growth lies ahead

  • The global freight forwarding market is estimated to have grown by 2.7% in real terms in 2016. However, collapsing air and sea freight rates saw revenues for most forwarders fall significantly. The market is forecast to grow at a real 2016 to 2020 compound annual growth rate (CAGR) of 4.1%, as global trade growth picks up.
  • The Global Freight Forwarding 2017 survey finds that excluding the impact of volume and rate changes, margin pressures for forwarders will intensify over the next five years, with investment in technology and offering new/more value-added services thought to be the most successful strategies to sustain margins. In addition, conventional forwarders are set to lose volume share to other parties, but the threat may be asymmetrical for air and sea.
  • Generally, there is little variation in gross profit margins among large forwarders: the difference between buy and sell rates is not where the game is won. What really differentiates them is how successful they are at turning their gross profit margin into underlying operating profit, as is evident from their varying conversion ratios.
  • Despite the perception that start-ups will have to dethrone incumbent logistics providers in order to succeed, the reality is that most of these emerging companies are set up to enhance or support today's successful forwarders. Nonetheless, a few of the more ambitious companies pose a direct threat, and their disruptive potential should not be taken lightly.

22 June 2017 Bath, UK – According to Ti’s Global Freight Forwarding 2017 report, the global freight forwarding market is estimated to have grown by 2.7% in real terms in 2016 (growth due to changes in volumes only, prices and exchange rates are fixed at the base year of 2016). This is up from 2.1% in 2015, on the back of higher air and sea volume growth.

However, thanks to a continuation of excess capacity issues and lower average oil prices in 2016, rates continued to fall in both air and sea freight, meaning most forwarders reported lower year-on-year revenues.

Real growth in the air and sea freight forwarding markets was remarkably similar globally, but this disguises significant differences across important countries and regions. For example, air freight forwarding growth in China is thought to have been robust, while sea freight growth was much weaker. Conversely, the United States saw moderate expansion in sea freight as air freight growth faltered.

Looking ahead, the market is anticipated to grow at a real 2016 to 2020 compound annual growth rate (CAGR) of 4.1%, as global trade volume growth accelerates.

Ti Economist, David Buckby, commented: “While air and sea volume growth picked up a bit in 2016, most forwarders experienced declining revenues on the back of substantial rate declines. As usual in such circumstances, the fall in forwarder sell rates did not match the drop in their buy rates, leading to improved gross profit margins. Over the medium term, I expect growth to pick up in line with higher global trade volume forecasts, though risks are tilted to the downside due to factors such as political uncertainty and trade protectionism.

The report also features a survey which questioned supply chain professionals on issues such as trade lane prospects, margin pressures, strategies for sustaining margins, the performance of the top 20 against the rest of the market, disintermediation, regionalisation, vertical sector opportunities and the effectiveness of online booking platforms. On profitability, survey results indicate that excluding the impact of volume and rate changes, margin pressures for forwarders will intensify over the next five years, with investment in technology and offering new/more value-added services thought to be the most successful strategies to sustain margins. In addition, conventional forwarders are set to lose volume share to other parties, but the threat may be asymmetrical for air and sea.

A deep dive into the world of technology in freight forwarding also features in the report, which examines the technologies changing the industry, the impact of digitisation, changes to the competitive landscape (such as tech-based forwarding, carrier disintermediation and e-commerce platforms), and ultimately whether forwarders can adapt and survive technological upheaval.

It also includes a ‘mystery shopper’ investigation of spot market booking platforms.

Ti Analyst, Alex Le Roy, remarked: “The research we have conducted indicates that there is substantial demand for online interfaces which allow forwarders to better serve shippers. Nonetheless, it is 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.

In his foreword to the report, Ti’s CEO, Professor John Manners-Bell, asserted that the forwarding sector is facing a challenging time, not least because the global economic environment has remained volatile and difficult to anticipate, though this was nothing new and the sector had always coped well in such circumstances. He cautioned however that structural challenges such as trends towards regionalisation and near-sourcing coupled with greater technological demands will prove more difficult to deal with.

He concluded: “Political, economic and technological pressure will continue to shape the industry in the coming year. One thing is certain, whether large or small, freight forwarders will need to remain agile if they are to flourish in an uncertain and complex world.

To find out more about Global Freight Forwarding 2017, or Ti’s expertise in the freight forwarding market, including analysis of its market size and forecasts broken down by regions and countries, strategies of the major 3PLs, analysis of technologies in the industry and more, visit the Ti website, or contact Ti’s Business Development Manager, Michael Clover.

This report is perfect for:

  • Global manufacturers
  • Banks and financial institutions
  • Supply chain managers and directors
  • Logistics procurement managers
  • Marketing managers
  • Knowledge managers
  • Investors
  • All C-level executives.
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