New report suggests an uptick for forwarders

Demand, capacity and profitability have all shown huge unpredictability both in the air and sea freight sectors, said analysts, yet it is confidence -- or rather the lack of it -- which has set the overall tone.

By ·

The global trading system is experiencing “extraordinary volatility” and this is being reflected in the performance of the freight forwarding industry, said Jon Manners-Bell of Transport Intelligence (Ti), a London-based think tank. Demand, capacity and profitability have all shown huge unpredictability both in the air and sea freight sectors, he said, yet it is confidence—or rather the lack of it—which has set the overall tone.

“In some respects the past twelve months have been a good time for the sector with demand recovering at a remarkable rate in a number of key routes,” he noted in a recent report.  “The crash in volumes experienced in 2008 and early 2009 appeared to herald a long term slump in global trade and logistics. However this slump has not occurred. Rather the reverse.”

Ti’s latest research indicates that despite the lack of capacity for both air cargo and ocean freight shippers, may well continue to the central problem, however.

According Manners-Bell, the sector was caught in the “perfect storm” of falling volumes and rates.

“Having benefited for so long from the growth of global supply chains, it now found itself in free fall as Western retailers and manufacturers were left with excess inventory in their warehouses,” he said. “This resulted in the suspension of orders to predominantly suppliers many of whom are based in Asia. The timing of this reaction could not have been worse.”

Indeed, he observed that with shipping lines and airlines still increasing their capacity, over capacity became rife on all major lanes and rates dropped dramatically. The result, said Ti analysts, was that the slowdown in 2008 became a slump in 2009 (the market fell by 23.4 percent) although by the end of the year the market was showing signs of upturn.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Six Ways Cloud ERP Supports Rapid Innovation
Kenandy is a new approach to ERP that lets you and your team focus on driving innovation, creating new product lines, and expanding your customer base even as you improve your business operations.
Download Today!
From the November 2016 Issue
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL) provider that could successfully combine transportation services and technology capabilities under one roof.
Warehouse & DC Operations Survey: Ready to confront complexity
2016 Quest for Quality Awards Dinner
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Best Practices: How to Efficiently Leverage APIs to Increase Your Net Income
Both legacy and modern technology leaders agree that leveraging API connectivity is critical in keeping up with the pace of a world that demands not only speed and agility, but also a deep level of visibility. During this session a panel of technology and industry experts discuss impact APIs can have on annual net income and market capitalization.
Register Today!
EDITORS' PICKS
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...

Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...