Business, Freight News

Traditional forwarding at risk, says Ti

[ July 16, 2015   //   ]

An erratic air and sea freight market, a shift in geographic focus and advanced technology and data analysis is bringing the traditional freight forwarding model into question, say consultants Ti.

In its annual Global Freight Forwarding 2015 report, Ti says that forwarders gained volumes but often found it hard to translate this into profits.

Meanwhile global trade is becoming more regional, with the top three flows in terms of valuebeing within Europe, Asia and North America and accounting for almost 50% of global trade in value terms for 2014.

Ti adds that technology “is having a transformative effect on the forwarding market.” Many forwarders are in the midst of upgrading and enhancing their individual systems; some have been successful while others have struggled. At the same time, e-commerce systems now allow shippers to compare rates, book shipments, track in real-time and perform data analysis. To survive, forwarders will need to plan, adapt and evolve or run the risk of becoming obsolete.

Meanwhile, though the freight forwarding market reversed its 2013 decline and improved in 2014, said Ti economist David Buckby.

Volume growth was actually robust in the year. For example, ranked by TEUs and tons, the top 20 in both sea and air forwarding saw average growth of about 5% in 2014. While the sea forwarding market was once again bogged down by year-on-year rate declines which meant another year of negative revenue growth overall, air forwarding rates on average declined only very slightly, permitting market growth for the first time since 2011.”