Air freight’s heady days are over – markets want a mix of convenient speed and price
Cargo Archive Stories issue 232
Monday, 01 September 2014
GLOBAL freight forwarders ‘must evolve’ to survive, according to a new study by Transport Intelligence.
The new report –‘Global Freight Forwarding 2014’ - shows the market declining in value by 3.3 per cent from 2012 and says the freight forwarding market faces challenges to stay viable.
The report highlights some of the key dynamics driving change in the freight forwarding sector: China is no longer the automatic ‘go to’ location in Asia to manufacture goods, particularly as opportunities open in other emerging markets such as Africa, the Middle East, South America and Southeast Asia; near-sourcing is becoming a reality as emerging markets including Mexico and Turkey benefit from their proximity to the US and the European Union respectively and there is also evidence of ‘re-shoring’ of manufacturing to developed countries due to the changing balance of transport and labour costs.
At the same time modal shifts are under way. Shippers are in search of different options such as slow steaming sea freight and quicker but more expensive air freight plus combinations of sea/air and road/rail solutions.
According to the report, capacity concerns within the air and sea freight markets combined with manufacturers focusing away from globalisation and towards regionalisation are resulting in changes to freight forwarding strategies and product solutions.
Many freight forwarders are struggling to cope with the changing dynamics. The best-in-class have adopted strategies that 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.
Transport Intelligence senior analyst Cathy Roberson said: “The global freight forwarding market is evolving and those forwarders that adapt quickest to economic and market changes will be the winners.”
Solutions such as multi-modal transportation options will likely be one of the trends.
Dependent on an improving economy, it is expected this market will produce a CAGR of 6.7 per cent through 2017.
Unsurprisingly, emerging markets will be the leaders in this growth as will the sea freight forwarding sub-segment. The report says the heady days of the air freight forwarding market are over as shippers now appear more rational in their approach to transportation management. Still, for high-value goods, air freight remains the preferred option for many shippers.
Air freight’s heady days are over – markets want a mix of convenient speed and price
Cargo Archive Stories issue 232
Monday, 01 September 2014
GLOBAL freight forwarders ‘must evolve’ to survive, according to a new study by Transport Intelligence.
The new report –‘Global Freight Forwarding 2014’ - shows the market declining in value by 3.3 per cent from 2012 and says the freight forwarding market faces challenges to stay viable.
The report highlights some of the key dynamics driving change in the freight forwarding sector: China is no longer the automatic ‘go to’ location in Asia to manufacture goods, particularly as opportunities open in other emerging markets such as Africa, the Middle East, South America and Southeast Asia; near-sourcing is becoming a reality as emerging markets including Mexico and Turkey benefit from their proximity to the US and the European Union respectively and there is also evidence of ‘re-shoring’ of manufacturing to developed countries due to the changing balance of transport and labour costs.
At the same time modal shifts are under way. Shippers are in search of different options such as slow steaming sea freight and quicker but more expensive air freight plus combinations of sea/air and road/rail solutions.
According to the report, capacity concerns within the air and sea freight markets combined with manufacturers focusing away from globalisation and towards regionalisation are resulting in changes to freight forwarding strategies and product solutions.
Many freight forwarders are struggling to cope with the changing dynamics. The best-in-class have adopted strategies that 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.
Transport Intelligence senior analyst Cathy Roberson said: “The global freight forwarding market is evolving and those forwarders that adapt quickest to economic and market changes will be the winners.”
Solutions such as multi-modal transportation options will likely be one of the trends.
Dependent on an improving economy, it is expected this market will produce a CAGR of 6.7 per cent through 2017.
Unsurprisingly, emerging markets will be the leaders in this growth as will the sea freight forwarding sub-segment. The report says the heady days of the air freight forwarding market are over as shippers now appear more rational in their approach to transportation management. Still, for high-value goods, air freight remains the preferred option for many shippers.
