Global logistics: Freight Forwarding in transition

In an otherwise troubled economy, some U.S. shippers are heartened by the fact that the weak dollar has meant more revenue return on exports. Domestic freight forwarders should be happy, too, but in the global arena the fight for middleman “market share” is key.

According to a recent report compiled by Transport Intelligence Ltd. (Ti) – Global Freight Forwarding 2009 – this dynamic sector “is in the eye of a recessionary storm.” Industry analysts examining 2008 and the first half of 2009 market growth rates, note that since the middle of last year there has been a massive reduction in demand for all forwarding services.

“Indeed such has been the magnitude of the fall that it suggests the sector is undergoing a systemic change,” said Ti analyst John Manners-Bell.

Furthermore, notes Manners-Bell, the market environment for freight forwarders is changing quickly, not only in terms of geography and type of business but also the competitive position of industry players.

“There is no doubt that the big forwarders are gradually gaining a greater market share, but in addition to this, the relative competitive position between the forwarders is also being adjusted,” he says.

Which is not an entirely bad thing, if you are among the leaders, said G. Edmond Clark, president & CEO, FedEx Trade Networks.

“Global trade trends continue to point toward a demand for both air and ocean freight forwarding services,” says G. Edmond Clark, president & CEO, FedEx Trade Networks. “Expanding the footprint of FedEx Trade Networks in critical growth markets will enable us to deliver a full-service transportation solution and better serve the global supply chain needs of our customers.”Ranked among the top ten by both Ti and the U.S. consultancy of Armstrong & Associates, Inc., FedEx Trade Networks is a forwarder to watch. Having recently expanded its operations in Beijing, Guangzhou and Shenzhen, China, FedEx Trade Networks is poised to support company’s growing international air freight forwarding operations and provide comprehensive coverage in key Asia-Pacific trade lanes.And this is “forward” thinking according to Manners-Bell, who noted that while the fall in volumes to and from China has been steep, the freight forwarding sector has been restructuring for a rebound.

“There has been an appreciable shift to lower value goods being moved by container ship, while higher value goods make-up a larger proportion of cargo moved by air,” observed Manners-Bell. “It seems that many shippers have taken the view that inventory velocity is not as important as lower transport costs – a situation influenced no doubt by low interest rates.”

Read the rest of the logisticsmgmt.com article here.