A report from Ti (Transport Intelligence) entitled “Global Freight Forwarding 2014” revealed that a declining freight-forwarding market is facing major challenges as it battles to stay viable in a changing global environment. The report cited troubling capacity concerns in the sea- and air-freight markets, as well as manufacturers tending to focus on regional as opposed to global markets which in combination have resulted in changes to freight forwarding strategies and product solutions.
The key dynamics cited for driving change in the freight forwarding sector are China no longer being the automatic choice in Asia for goods manufacture, given other emerging markets such as Africa, the Middle East, South America and southeast Asia; and the rise of near-sourcing markets such as Mexico and Turkey benefitting from their proximity to the US and Europe respectively. The report also cited evidence of ‘re-shoring’ of manufacturing to developed countries due to the changing balance of transport and labour costs.
As a result of the trends, new trade lane opportunities are opening and are already evident among the top EU and US trade lanes by tonnage, which include the likes of Brazil, Algeria and Turkey. Along with the trade lane opportunities, new product solutions are also on the increase. These include multi-modal transport as an alternative to air and/or sea freight movement as well as industry-specific solutions particularly for those commodities requiring temperature-control management such as pharmaceuticals, foods and some high-tech goods.
More worrying is that many freight forwarders are said to be struggling to cope with the changing dynamics. The more efficient are said to have adopted strategies which include a focus on emerging markets and specific industries. However, from a financial perspective, many are faltering because of fluctuating rates and capacity within the air and sea freight markets.
Sources:
http://www.transportintelligence.com/
http://www.porttechnology.org/news/report_reveals_challenges_for_global_freight_forwarding
