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The global forwarding market is seen to expand by 1.7% in real terms in 2024, according to the Global Freight Forwarding 2024 Report from Ti Insight
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The data also shows the total market posting a real compounded annual growth rate of 3.3% over the five years to 2028
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In 2023, the market contracted 1.3% in real terms and by 45.6% in nominal terms
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Asia Pacific experienced the third-largest market contraction compared to other regions
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Kuehne + Nagel remained the world leader in global freight forwarding in 2023
The global forwarding market is expected to expand 1.7% in real terms in 2024, according to the Global Freight Forwarding 2024 Report from Ti Insight, considered the leading provider of market research to the global logistics industry.
The data also shows the total market posting a real compounded annual growth rate of 3.3% over the five years to 2028.
The latest figures compare with a 1.3% market contraction in real terms in 2023, bringing the market value to €192,730 million, and by 45.6% in nominal terms with the significant drop attributed to reduced freight rates for both sea and air, the report said.
The contraction was caused by three factors, namely shifts in consumer behavior; challenges posed by the global economic downturn; and an oversupply surpassing demand.
The air freight market forwarding shrank by 2.1% last year, while sea freight forwarding contracted by 0.6%.
The global economic downturn proved to be the biggest reason for the weak results in the forwarding market.
Industry researchers, analysts, and data from Ti’s GSCi knowledge portal were the sources of the Global Freight Forwarding 2024 report. Over one million pieces of data and analysis were used.
“The market for freight forwarding has reflected the volatility of the wider market for air and sea freight over the past four years,” said Thomas Cullen, chief analyst at Ti, adding that “for large freight forwarders, especially the years 2020-22 were a boom, with revenues increasing by half and profits doubling.”
However, 2023 saw results falling ‘back to earth’ with profits and revenues falling as the markets returned to what might be called some sort of normality, said Cullen.
The Ti analyst further said “the balance between non-asset-based service providers such as freight forwarders and asset owners such as airlines and shipping lines has experienced significant instability.”
Asia Pacific experienced the third-largest market contraction compared to other regions, while still remaining the largest region, accounting for 35% of global freight forwarding market.
A 2024 Ti survey showed that 91.1% of freight forwarders are now experiencing heightened pressure on margins, spurred by rising competition and stronger negotiation by clients.
The best strategy to reverse eroding margins in the near future would be to target higher-margin clients and offering more value-added services, said the report.
All the top 20 forwarders experienced revenue declines last year, said the Ti report.
Kuehne + Nagel remained world leader in global freight forwarding, added the report, with revenues of €15,988m in 2023.
READ: World freight forwarding market to shrink 3.9% in 2023
