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Freight forwarders less fragmented, says new study

[ September 2, 2011   //   ]

The freight forwarding industry is becoming more concentrated in the hands of larger players, according to a new study by Transport Intelligence. While the industry has historically been very fragmented with small firms based in one location competing with larger global concerns, larger players have been steadily gaining market share since 2007, says Ti.

However, the industry is still very competitive and fragmented compared with more concentrated sectors, according to Ti which used sophisticated statistical analysis to ‘map’ the degree of fragmentation.

Ti’s Thomas Cullen said: “The quantitative change is not huge but the trend is clear. The sector is consolidating with greater power gravitating towards the top ten forwarders.”

He added that the results raised the question of what is driving this trend. “Is it a passing phase, possibly driven by the recession or does it reflect a secular change in the structure of freight forwarding?” It was possible, he said, that heavy investment in information technology by larger firms “has improved not just productivity but also the ability to respond to short-term changes in the market.”The big forwarders may also be better positioned to serve larger customers involved in global operations.

However, the statistic evedicne suggests that, up to 2005, smaller forwarders weer gaining market share at the expense of larger ones so the latest trend could just be a short-term blip.