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Forwarding market value declines 3.3pc, but good times ahead: Ti study

THE global forwarding market declined in value 3.3 per cent year on year in 2013, but the outlook through to 2017 is much improved, according to the UK's Transport Intelligence.

Ti's Global Freight Forwarding 2014 study found that the sector's earnings in 2013 were still behind the highs of 2011 and operating profits had fallen during the same period.

But Ti concluded that the forwarding market would recover as the excess of ships and freighters was reduced by higher demand, helping boost margins and rate stability.

"Forwarders have had a few tough years. But those able to up their game will flourish in the years ahead," said Ti analyst Cathy Roberson, the report's lead author.

"The outlook through to 2017 remains positive with forecasted growth of 6.7 per cent compound annual growth rate (CAGR) over 2013-2017 led by growth in ocean forwarding," said the 177-page report.

Ms Roberson said forwarders were also increasingly seeking out new areas of growth to bolster bottom lines.

"Regionalisation" had caused a shift in growth from east-west flows to more complex trade routes with links to emerging markets and additional complexity added by near-sourcing and protectionist policies, she said.

Forwarders, noting these shifts, have identified area where they can achieve most growth. "So there is more focus on emerging markets and also as perishables and healthcare."

To this, Ms Roberson added game changing factors such modal shifts and IT systems upgrades, providing global visibility and often by using cloud-based technology.

"They are offering customers more options on more lanes by expanding LCL by sea, or using air-sea systems, and also by offering road options such as road/rail which are particularly important as regionalisation grows," she said.