News & Media
Welcome to the 51st edition of Service without Boundaries, the U-Freight Group’s quarterly newsletter.
The saying that headlines this piece came to mind as I was reading a recent report issued by consultant Transport Intelligence (Ti) about the current state and future prospects of the freight forwarding market.
Whilst there may be some uncertainty about harvests in the global farming sector this year, Ti reports that according to its research the global forwarding market had a record ‘harvest’ in 2021, rebounding and exceeding its pre-pandemic levels.
It added that whilst limited capacity and record high freight rates present a challenging market for shippers and freight forwarders, the global freight forwarding market grew by 11.2% in real terms during 2021, the fastest expansion in a decade, and forecasts that the market will grow 5.7% in 2022 and at a 3.7% compound annual growth rate over the five years to 2026.
The market’s expansion was driven by global trade which reached new record highs during the year as recovery from the Covid-19 pandemic boosted demand. As well as the phasing out of pandemic-related restrictions on economic activity, government support schemes and economic stimulus packages introduced in many countries remained, keeping demand for goods at elevated levels.
However, Ti’s report foresees that the drivers of the growth momentum are likely to gradually abate, with forecasts for the period 2023-2026 being more pessimistic due to inflation, the war in Ukraine, and consumer spending slowing down.
The entrance of shipping lines into the acquisition market has created a new driver of industry consolidation, not least due to the carriers’ almost unlimited funds and access to ‘cheap’ money. But ocean freight and port congestion show few signs of improvement and will continue to push traditional ocean shippers into the air freight market.
It was interesting to read that the digitalisation trend in the forwarding industry, which was already gathering pace before the pandemic, has been accelerated further by the crisis with the adoption of digital forwarders, online freight booking platforms and marketplaces increasing threefold since 2019.
Many believe these ‘newbies’ could become game changers in the industry, and I was somewhat surprised to read that digital forwarders and booking platforms are used by 81% of the shippers and logistics service providers (LSPs) that were surveyed by Ti. What it does not indicate is whether the users are satisfied with their experience, nor how successful the digital forwarders and booking platforms have been in their aim to combine smart technology with actual operational experience.
Clearly, however, driven by challenging market conditions, shippers are re-assessing their freight procurement strategies and contractual relationships with LSP to adjust to the ever-changing environment.
To any of you thinking of switching to a digital rival I say, look before you leap, or you may find that all that glistens is not gold, but please don’t hesitate to contact me if you would to discuss further. I also hope that you enjoy the contents of our latest newsletter.
The saying that headlines this piece came to mind as I was reading a recent report issued by consultant Transport Intelligence (Ti) about the current state and future prospects of the freight forwarding market.
Whilst there may be some uncertainty about harvests in the global farming sector this year, Ti reports that according to its research the global forwarding market had a record ‘harvest’ in 2021, rebounding and exceeding its pre-pandemic levels.
It added that whilst limited capacity and record high freight rates present a challenging market for shippers and freight forwarders, the global freight forwarding market grew by 11.2% in real terms during 2021, the fastest expansion in a decade, and forecasts that the market will grow 5.7% in 2022 and at a 3.7% compound annual growth rate over the five years to 2026.
The market’s expansion was driven by global trade which reached new record highs during the year as recovery from the Covid-19 pandemic boosted demand. As well as the phasing out of pandemic-related restrictions on economic activity, government support schemes and economic stimulus packages introduced in many countries remained, keeping demand for goods at elevated levels.
However, Ti’s report foresees that the drivers of the growth momentum are likely to gradually abate, with forecasts for the period 2023-2026 being more pessimistic due to inflation, the war in Ukraine, and consumer spending slowing down.
The entrance of shipping lines into the acquisition market has created a new driver of industry consolidation, not least due to the carriers’ almost unlimited funds and access to ‘cheap’ money. But ocean freight and port congestion show few signs of improvement and will continue to push traditional ocean shippers into the air freight market.
It was interesting to read that the digitalisation trend in the forwarding industry, which was already gathering pace before the pandemic, has been accelerated further by the crisis with the adoption of digital forwarders, online freight booking platforms and marketplaces increasing threefold since 2019.
Many believe these ‘newbies’ could become game changers in the industry, and I was somewhat surprised to read that digital forwarders and booking platforms are used by 81% of the shippers and logistics service providers (LSPs) that were surveyed by Ti. What it does not indicate is whether the users are satisfied with their experience, nor how successful the digital forwarders and booking platforms have been in their aim to combine smart technology with actual operational experience.
Clearly, however, driven by challenging market conditions, shippers are re-assessing their freight procurement strategies and contractual relationships with LSP to adjust to the ever-changing environment.
To any of you thinking of switching to a digital rival I say, look before you leap, or you may find that all that glistens is not gold, but please don’t hesitate to contact me if you would to discuss further. I also hope that you enjoy the contents of our latest newsletter.
Latest News About U-Freight
ISSUE 51
Huge growth projected for e-commerce logistics market
As an international logistics service provider with a significant commitment to e-commerce logistics, U-Freight notes that a recent report by market research organisation, Future Market Insights suggests that the global e-commerce logistics market is estimated to reach USD531.6 billion in 2022 and is projected to reach USD2,734.6 billion by 2032.
Latest Industry News
ISSUE 51
Report says disruption and high freight rates created by competition authorities
With a comprehensive portfolio of ocean freight forwarding services around the globe, the U-Freight Group notes that according to a report on the Loadstar website, competition authorities around the world have facilitated the disruption in global supply chains by effectively creating “a supportive legal framework for alliances and consortia” to manage global rates.
ISSUE 51
Aircraft makers offer different forecasts on cargo growth
With our long history and strong presence in the expedited airfreight market, we note that in its latest Market Outlook spanning the next two decades, Boeing forecasts a faster growth of the cargo business compared to the passenger business, which conflicts from an Airbus analysis in which air freight is predicted to advance at a significantly slower pace over the next 20 years.
ISSUE 51
Just-in-time supply chains: A thing of the past?
With our portfolio of supply chain management services, the U-Freight Group was interested to read that freight and shipping decision makers at the recent Multimodal 2022 conference believe that the switch away from the pre-civid just-in-time (JIT) supply chain model towards a more cautious local warehousing approach by shippers and end users is set to stay until confidence in the resilience of global ocean freight transport systems is restored.
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