The global freight forwarding market is booming, though slowing economic activity, higher security costs, and rising fuel prices may crimp that freight growth in the near future. According to the “Global Freight Forwarding 2007” report by London-based research firm Transport Intelligence, the ocean freight market increased 15% in 2006, while global airfreight revenues rose by 12%.
Steady economic growth in Europe supported Asia-Pacific trade, while the U.S. economy did not decelerate as much as feared, said John Manners-Bell, the report’s author.
Intra-Asian trade was also a key driving force and has become the focus of many forwarders’ development strategies, he added.
“The freight forwarding industry is enjoying a period of unparalleled growth and prosperity,” Manners-Bell noted. “The potential for future profits is high, and this will inevitably lead to further M&A [merger and acquisition] activity.”
However, he cautioned that ’07 wouldn’t be a rose-garden for forwarders. “We must not assume that growth and profits are inevitable, as the industry faces more uncertain times ahead. A challenging macro-economic environment, security issues and fuel costs plus fluctuations in carrier capacity means only the most agile forwarders will prosper.”