17 August 2009

Report finds freight forwarding market fragility 

The following is excerpted from the 14 August 2009 edition of “American Shipper”.

The current demand downturn could force consolidation within the freight forwarding industry, suggests a recent report by Transport Intelligence.

“The freight forwarding sector is in the eye of a recessionary storm,” said TI Chief Executive John Manners-Bell. “Since the middle of 2008 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 of considerable magnitude.”

That systemic change seems to indicate that consolidation will necessarily come, said the report, Global Freight Forwarding 2009….

Forwarders involved in ocean freight have seen good news and bad news this year.

“The implications of (the mismatch between supply and demand) for freight forwarders have been two-fold,” he said. “The fall in demand has had a substantial effect on revenue, yet the fall in rates has had an ameliorative impact on margins.”….