Ti’s latest report, Global Freight Forwarding 2022, shows that in 2021 the global forwarding market rebounded and exceeded its pre-pandemic levels. However, limited capacity and record-high freight rates present a challenging market for shippers, as well as opportunities for extraordinary ‘uplift’ in the profitability of freight forwarders.
- The global freight forwarding market grew by 11.2% in real terms during 2021, the fastest expansion in a decade. The market is forecast to grow 5.7% in 2022 and at a 3.7% CAGR over the five years to 2026.
- 2022 freight forwarding growth will be driven by air freight, which is forecast to grow by 6.1% in real terms.
- 2026 forecasts are more pessimistic due to inflation, the war in Ukraine, and consumer spending slowing down.
- The air forwarding market is forecasted to exhibit slightly faster growth, expanding at a 4.0% CAGR from 2021-2026, while the sea forwarding market is expected to grow slightly less quickly at 3.6% CAGR over the period.
The market’s expansion was driven by global trade which reached new record highs during the year as recovery from the Covid-19 pandemic boosted demand. As well as the phasing out of pandemic-related restrictions on economic activity, government support schemes and economic stimulus packages introduced in many countries remained, keeping demand for goods at elevated levels. Factors such as the expansion of the e-commerce industry and the rise of free trade agreements have also been contributors to the growth of the global digital freight forwarding market in 2021.
As the drivers of the growth momentum are likely to gradually abate, global trade growth is expected to moderate in 2022. As a result of this continued but weakened global economic recovery, the global forwarding market is expected to grow at a slower pace of 5.7%. Continuing the trend from 2021, growth will be driven by the air freight forwarding market, which is forecasted to grow by 6.1% in real terms. The sea freight forwarding market will have to endure more months of challenging conditions caused by the capacity crunch as new capacity is not set to kick in till 2023. It is set to grow at 5.2% in 2022.
This is an excerpt from the Global Trade News Article.