A new report from Ti, Global Freight Forwarding Update 2019/2020, focuses on some of the key factors inhibiting market growth, as well as the solutions that can help forwarders gain an edge in the years ahead.
The trade war fits into the former category, having severely damaged US-China trade volumes so far this year. In volume terms, it is likely 2019 will be the first time both air and sea freight exports from China to the US have fallen since the global financial crisis. Overall import volumes for the US remain moderate, with a number of countries filling the void. Notably Vietnam has seen more export growth to the US in absolute volume terms by both air and sea than any other country. For a number of the nations gaining volumes at the expense of China, the trade war seems to have accelerated the growth story, rather than jump-started it.
The effects of the trade war are seen when viewing how the market has contracted over the first half of the year. The global air freight forwarding market for example shrank by 4.2% year-on-year in real terms in H1 of 2019. The sea forwarding market has grown, but it has also struggling given the uncertainty in the wider international trading environment. The loss of US-China trade has exposed the significant intra-regional supply chains that feed into this lane. Exporters of components and semi-finished goods which are used in finished good exports have suffered significantly as a result.
Whilst the trade war may turn out to be a short-term phenomenon for forwarders to address, the rising importance of digital offerings requires more long term strategic thinking. A variety of new digital offerings have sprung up recently providing easy booking and quotation services to shippers. Ti categorises the types of offerings within the digital freight forwarding landscape. It discusses the reasons for providing these types of services and how carriers have responded with offerings of their own.
In a similar vein, decisions over software are an increasingly important strategic focus. Ti explores how forwarders choose between in-house and third-party solutions. The report also explores the rise of cloud computing and its influence on decision makers in forwarding companies.
Andy Ralls, Quantitative Analyst and co-author of the report, commented, “The escalating trade war has been one of the main reasons behind the contraction of the market in the first half of 2019. With tensions showing little sign of abating, the market could contract at its worst level in a decade.”
Beth Poole, Qualitative Analyst and co-author of the report, added, “Choosing the right forwarding software is critical to ensuring the company remains competitive. If used correctly, these can be a key differentiator and lead to stronger customer relationships. However, getting this decision wrong can be an expensive mistake.”
Source: Transport Intelligence, November 18, 2019
Author: Transport Intelligence
About Ti’s Global Freight Forwarding Update 2019/2020
Ti’s Global Freight Forwarding Update examines mid-year market growth, the effect of the US/China trade war and advances in supply chain technologies, providing a comprehensive, up-to-date picture of the Global Freight Forwarding landscape.
This report contains:
To find out more about the report, click here or contact Michael Clover by calling +44 (0) 1666 519907 or emailing [email protected]
