Opportunities and Challenges:

The international freight forwarding industry, including global (T25), regional and local hero forwarders, has been a long-term, multi-decade beneficiary of globalization. During COVID, international freight forwarders benefitted from a covid bump from a consumer spending shift of services to goods, especially around technology goods and household items. With this shift ending and inventory levels resetting, the business faces increased volatility putting even more emphasis on optimal spread management between buying and selling capacity at the optimal price.

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Both the air cargo and sea freight subsegments face challenges that will further restructure the industry. With the reset of the air cargo supply chain, belly capacity will come back online allowing more routing options at a lower price while there is also the risk of oversupply from increased freighter capacity. For sea freight, the period of high prices due to tight supply is cycling to a period of increased capacity with new deliveries arriving between 2023-2025.

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As the limits of globalization have been hit and off-/near-/on-shoring is happening, the re-architecture of supply chains poses challenges for the industry and forwarders have to be responsive in terms of their network footprint, trade lane structure. Future growth opportunities require improved productivity in the back offices (transactions per FTE), optimal spread management and a long-term e-commerce strategy for both domestic last-mile deliveries and international/intercontinental cross-border ecommerce shipments.