Is traditional freight forwarding model obsolete?

A combination of the erratic global air and sea freight markets, a growing shift in geographic focus towards the regional and the application of advanced technology and data analysis to the market is bringing the fate of the traditional freight forwarding model into question, according to a new report from Transport Intelligence (Ti).


A combination of the erratic global air and sea freight markets, a growing shift in geographic focus towards the regional and the application of advanced technology and data analysis to the market is bringing the fate of the traditional freight forwarding model into question, according to a new report from Transport Intelligence (Ti).

Ti’s annual Global Freight Forwarding 2015 report notes that capacity excesses and declining rates describes a tumultuous sea freight market, while air freight celebrated a revival of volume gains in the last half of 2014, though rates remained fairly flat. On average, forwarders gained volumes but translating these volumes into profits proved difficult for some.

Meanwhile it appears the focus on global trade is shifting towards regional flows. The top three trade flows in terms of value are intra-regional within Europe, Asia and North America. Combined, these intra-regional flows comprised almost 50 per cent of global trade in value terms for 2014. As such, Ti sees M&A activity on the rise and growing introductions of new products such as multi-modal transportation to support these growing demands.

Finally the application of technology and data analysis is having a transformative effect on the forwarding market. Many forwarders are in the midst of upgrading and enhancing their individual systems.