The end of the Golden Age?

An interesting report was recently authored by Merrill Lynch and while aimed more at the ocean forwarding side, it clearly has relevance for the air freight forwarding sector. Entitled ‘After the Golden Age’, it outlines Merrill Lynch’s opinion that “the structural growth story for the freight forwarding industry is being gradually undermined by changes in world trade patterns”.


The end of the Golden Age?


The report highlighted that all of these factors undermine “the principal reason why global trade has historically grown faster than global GDP – the emergence of international supply chains”. With less complex and shorter global supply chains, there can be no alternative but smaller profits for freight forwarders. Certainly tougher, more competitive market conditions and fewer opportunities for market share growth will also impinge on profit margins.

Perhaps we’ve all clung too long to an ‘old’ paradigm of supply chain management, something the increasingly dynamic global economy may no longer entertain. Certainly food for thought as the air cargo industry grapples with the challenges of today’s global economy and struggles to reshape itself and devise a new business model.