The freight forwarding market is instrumental in the transportation of raw materials, equipment, finished goods, and other components by land, sea, and air. It involves consolidating smaller shipments from multiple shippers and transporting them efficiently using bulk transportation services. Freight forwarders help reduce transportation costs by offering competitive rates to businesses for movement of cargo across borders. With advancements in digital technologies, players in the market are implementing analytics, automation, and IoT solutions to provide enhanced visibility and streamline the logistics process.
The global freight forwarding market is estimated to be valued at US$ 286.5 Bn in 2024 and is expected to exhibit a CAGR of 10.5% over the forecast period of 2024 to 2030.
Factors such as rapid urbanization, growth of international trade, development of multimodal transport infrastructure will contribute to the market growth. Digitalization is enabling freight forwarders to optimize costs, improve transit times and offer different value-added services to shippers and consignees.
Key players: Key players operating in the freight forwarding market are Abbott Laboratories, Amgen Inc., GlaxoSmithKline, Johnson and Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Inc., Roche, and Sanofi €“ Aventis.
Key opportunities: Rising cross-border e-commerce activities are creating opportunities for freight forwarders to offer services beyond traditional LCL/FCL cargo. Adoption of blockchain, IoT, AI and predictive analytics presents new avenues for enhancing supply chain visibility and efficiency.
Technological advancements: Implementation of cloud computing, big data analytics, blockchain and automation solutions are helping players provide real-time tracking, improve forecasting abilities and optimize operations through digitalization of supply chain processes.
Increased globalization and growth in international trade volumes will drive demand for cargo transportation and freight forwarding services. Other factors like rapid growth of food and pharmaceutical industries, expansion of manufacturing sectors and evolution of supply chain networks will also propel market revenues.
Challenges in the Freight Forwarding Market
The Freight Forwarding Market is facing challenges due to rising fuel prices and geopolitical conflicts. High fuel costs have significantly impacted freight operators as diesel is a major input cost. The ongoing Russia-Ukraine war has also disrupted global supply chains. Congested ports and a shortage of containers are causing delivery delays. Finding and retaining skilled workers is another impediment as the talent pool is limited. Technology adoption remains gradual among smaller players due to the expenses involved. Environmental regulations around carbon emissions pose compliance challenges.
Strength: Established global network and scale of operations. This allows timely and cost-effective services.
Weakness: High dependency on fuel prices leaves operators vulnerable to volatility. Smaller players have limited financial resources for technology investments.
Opportunity: Growth of e-commerce and just-in-time manufacturing is increasing demand for logistics services. Advancements in analytics and automation open up efficiency opportunities.
Cross-border trade agreements between countries also augur well.
Threats: Intense competition from regional and global rivals. New entrants are adopting technology aggressively. Disruptions from natural calamities, epidemics or political conflicts are hard to mitigate against.
The North American and European freight forwarding markets account for over 60% of global market value currently due to extensive trade volumes. However, growth is concentrated in Asia as manufacturing shifts to countries like China, India and Vietnam coupled with their rising consumption. Between 2024-2030, the Asia Pacific region excluding Japan is projected to witness a CAGR of 12% in market size – the highest globally. This surge will be powered by growing intra-Asia trade as well as export focus towards Western markets.
Current challenges in the Freight Forwarding Industryb
The freight forwarding industry is facing multiple headwinds presently. High inflation has ratcheted up operational costs significantly, squeezing profit margins. Fuel costs have soared due to geopolitical tensions and supply concerns, directly impacting transportation charges. Congested ports and a lack of containers continue to plague global supply chains. Finding and training talent is a challenge as the industry grapples with staff turnover. Meeting environmental regulations is another pressing task that requires investments in green technology and infrastructure. Delays from lockdowns in China have also disrupted schedules. Overcoming these near-term hurdles will test the resilience and adaptability of all players.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it