The Freight Forwarding Market is estimated to be valued at USD 176.12 Bn in 2024, exhibiting a CAGR of 4.8% over the forecast period (2024-2031). Furthermore, rising globalization and expansion of manufacturing sectors across developing nations will continue augmenting the market growth.
Market Dynamics:
The growth of the freight forwarding market is driven by growing international trade and advancements in digitization. Rising globalization has led to an increase in trade volumes, with more finished goods, parts and raw materials being shipped across borders. This has significantly boosted the demand for freight forwarding services from the manufacturing and trade industries. Advancements in digitization is another key driver as it allows freight forwarders to offer better visibility and track shipments more efficiently using technologies like Blockchain, GPS tracking, and web-based shipment management platforms. This has improved customer experience and prospects for freight forwarders.
Advanced technologies are enabling real-time tracking of shipments across modes, reduced administrative costs, and optimized logistics networks. Furthermore, blockchains provide a tamper-proof digital ledger to ease documentation processes and border compliance checks. Such initiatives have streamlined global supply chains and drive the use of digital freight forwarding solutions. On the other hand, growing e-commerce is promoting smaller and more frequent shipments, benefiting freight forwarders.
Market Drivers
Increased Global Trade Volumes
One of the key drivers for the growth of the freight forwarding market has been the steady rise in global trade volumes over the past few decades. As international trade barriers have come down and economies have become more integrated globally, the volumes of goods being traded across borders has increased significantly. This has directly benefited freight forwarders as shipping and transporting all these traded goods globally is core to their business. Forwarders help facilitate and manage the complex logistics of moving shipments across multiple geographies. As long as globalization and trade volumes continue to rise, it will remain a strong growth driver for this market.
Growing E-Commerce Sector
Another major driver has been the explosive growth of the e-commerce sector globally. More consumers are now shopping online and having goods delivered directly to their homes. This has resulted in a lot more small shipments requiring delivery to individual addresses as compared to bulk shipping to warehouses or distribution centers. Forwarders play an important role in efficiently coordinating these smaller B2C shipments across supply chains. Their technology and network help optimize routing and delivers cost savings even for small shipments. Their services are well-aligned to cater to the demanding logistical needs of e-commerce companies, propelling market growth.
Market Restraints
Volatile Energy Costs
One key restraint affecting the freight forwarding industry is volatility in energy costs, mainly oil prices. Since a huge portion of the shipping and transportation industry relies on fuel such as diesel, increases in oil prices directly impact overall operating costs. High fuel costs erode profit margins for forwarders and make services relatively expensive for shippers. Unexpected spikes in oil prices, geopolitical tensions, or supply chain issues can negatively impact demand from cost-sensitive customers. Stable and predictable energy costs are essential for a conducive business environment.
Labor Shortages
Another restraint is the acute shortage of qualified labor that the industry has been facing. Forwarders require skilled workers who can manage complex operations, liaise with multiple stakeholders, and have in-depth knowledge of regulations. However, attracting and retaining talent has become increasingly difficult. An aging workforce, lack of training programs, intense competition from other sectors, and non-friendly immigration policies in some countries are exacerbating existing labor shortfalls. Forwarders may find it hard to scale up operations and maximize growth potential until this core issue is addressed.
Market Opportunities
Growing Multimodal Transport Needs
One major opportunity lies in the rising demand for multimodal transportation and integrated supply chain solutions. Global traders increasingly require flexible options to ship goods using multiple modes such as sea, road, and rail depending on shipments, timelines, and budgets. Forwarders that offer a combination of air, ocean and trucking services supported by technology platforms are well-positioned to capture this demand. Their ability to seamlessly coordinate complicated intermodal moves across the globe gives them an advantage.
Technology Adoption and Digitization
Technology adoption and digitization of the industry presents significant opportunities for growth and differentiation. Forwarders embracing automation, IoT, Blockchain, AI, and predictive analytics across the supply chain can reduce costs, enhance visibility, optimize processes, and deliver more value to clients. Those innovating new digital solutions and platforms will be ahead of the curve. Offering apps, online booking interfaces and predictive ETAs helps attract newer merchant customers as well. Increased technology usage also opens up avenues to disrupt existing models and exploit new revenue pools.
Link - https://www.coherentmarketinsights.com/market-insight/freight-forwarding-market-4464
Key Developments:
- In October 2023, American Airlines Cargo benefited from an expanded winter schedule comprising over 12,500 round-trip flights operated by American Airlines between November and March 2024. This expanded schedule includes increased frequencies on major international routes, particularly with over 6,900 widebody flights dedicated to transatlantic routes.
- In August 2023, Cargo-partner introduced a new air freight solution originating from Chicago to assist clients exporting goods to the U.K. Beginning on June 1, 2023, Cargo-partner commenced a new consolidation of air freight operations from Chicago to Heathrow Airport in London, offering weekly departures and supported by an in-house team of trade experts to cater to both domestic and international customers.
Key Market Players:
Key companies covered as a part of this study include Agility Logistics, Bolloré Logistics, CEVA Logistics (a subsidiary of CMA CGM), C.H. Robinson Worldwide Inc., DB Schenker, DHL (part of Deutsche Post AG), DSV, Expeditors International of Washington, Inc., FedEx Corporation, GEODIS, Hellmann Worldwide Logistics, Kerry Logistics Network Limited, Kuehne+Nagel Inc., Maersk, Nippon Express Co., Ltd., Panalpina (part of DSV), Sinotrans Limited, UPS (United Parcel Service of America, Inc.), Yusen Logistics Co., Ltd., and XPO Logistics, Inc.
