Niche forwarders can still rise to the top

Experts contend that “the barrier to entry” into the freight forwarding business is not insurmountable, noting that for those with a defined business plan focusing on specific niche marketing, there’s still room at the top

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Damco’s recent announcement that it would expand its services may have surprised some industry insiders, but not Brandon Fried, Executive Director of The Airforwarders Association.

He contends that “the barrier to entry” into the freight forwarding business is not  insurmountable, noting that for those with a defined business plan focusing on specific niche marketing, there’s still room at the top.

“The days of opening a generalized freight transportation business by the small guy may be over in favor of a more focused and specific transportation approach,” he says. “Of course, this includes offering additional services that complement the transportation of the box itself. These may include warehousing, local distribution, pick and pack or some form of commodity assembly before shipping. The sensitive, personal touch is always in demand and appreciated by customers who are not willing to be an anonymous entity with their freight company.”

Fried says that while each of the “giant” providers does interesting work, Kuehne & Nagel tends to receive lots of coverage for its creative shipment fulfillment solutions before or after the transportation cycle occurs.

“However, we cannot fail to mention companies like Expediters,” he says. “This is an outfit that is highly regarded by their customers and continues to receive accolades – not only from clients but Wall Street as well –since the firm is highly profitable in a very competitive asset free environment.”

Meanwhile, Damco remains cautiously optimistic about its prospects for the remainder of 2011.

“Our results are encouraging, especially considering the ongoing slowdown of global freight markets. Our bottom-line remains solid and year-on-year we have improved our sales of new business in the first half of 2011 by 37 percent. We are winning more and more large customers and securing strategically important wins within our key target industry verticals. We expect a continued challenging market for the rest of 2011, but our mind is still set on growth. What is also important is that these results have been achieved whilst at the same time we also invest in resources to service and develop our customers and in IT solutions and developing new and enhanced service offerings” said Rolf Habben-Jansen, Chief Executive Officer, Damco.

Finally, in August Damco acquired a majority stake in New Times Transportation in China – which will significantly further strengthen its Global Airfreight Product and make Damco a substantial player in that segment from all main origins in Asia.

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]

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