| With increases in fuel prices and a slowing economy | | | | scale. |
| worldwide, the international freight industry faces | | | | Inevitably, some weaker freight forwarding |
| new challenges. | | | | companies will go to the wall as the tough trading |
| So what are the trends we are seeing in the | | | | conditions define the winners and the losers in the |
| international freight market and how will they affect | | | | international freight market. But the stronger freight |
| the customer? | | | | forwarding companies will become still stronger as |
| The global freight forwarding market stood at 116.8 | | | | they continue to innovate to address the market |
| billion Euros in 2007, growing by just under 11%. | | | | challenges. |
| This was the lowest level of growth seen by the | | | | Some question marks hang over the China import |
| international freight market for four years. The | | | | market as labour costs in China spiral and it becomes |
| slowdown was caused mainly by the impact of the | | | | more costly as a manufacturer. For example, Asda |
| weak economy in the US on the freight forwarding | | | | has said recently that they may shift some of their |
| market but, with the European economy now also | | | | sourcing to Vietnam as the benefits of China import |
| showing signs of trouble, growth in freight forwarding | | | | are being eroded by rising labour and suppliers' costs, |
| is expected to slow still further this year and next. | | | | and more supermarkets are expected to follow suit. |
| The credit crunch has had a big impact on China | | | | However, despite this, China import and trade with |
| import to the US, a freight forwarding market which | | | | Asia will continue to be the rising star of the |
| had previously been flying high. Although this decline in | | | | international freight market and profits from Asian |
| freight forwarding was offset a little by an increase | | | | freight forwarding will help freight companies invest in |
| in US exports caused by the weakness of the dollar, | | | | new customer services. |
| shipping companies are now thinking about how best | | | | Increased competition between freight forwarding |
| to weather stormy market conditions ahead. | | | | companies is likely to lead to new product |
| The good news is that as they are asset light, | | | | development as freight forwarders add on more |
| freight forwarding companies are better placed than | | | | value-added services to differentiate themselves |
| some to ride out the coming recession and freight | | | | from the shipping company down the road.There is |
| forwarders are in one of the strongest positions in | | | | also likely to be an increasing focus on improving |
| the freight industry. So it is from the freight | | | | customer service. |
| companies that customers can expect to see most | | | | What's more, the freight forwarding industry will see |
| innovation in the international freight industry in the | | | | more use of IT to automate processes and reduce |
| next year or two. | | | | costs. This will be good news for customers as it |
| International freight customers can expect to see | | | | means more transparency in the international freight |
| some big changes on the horizon. | | | | industry. Increased use of technology will improve |
| We can expect to see migration of some air freight | | | | communications between shipping companies, |
| traffic to the cheaper option of freight forwarding by | | | | customers and the end recipients, providing a better |
| sea, as many customers decide to make savings in | | | | service all round. Integrated IT will also be used to |
| this way. This is likely to be accompanied by less | | | | increase customer choice in international freight - for |
| growth in the 'express' sector of the international | | | | example, between 'green' options for freight |
| freight market as some customers opt to | | | | forwarding as an alternative to the fastest freight |
| compromise speed in freight forwarding for cost | | | | transport options. |
| savings. | | | | And lastly, excess shipping capacity leading to |
| We are also likely to see more mergers and | | | | cheaper freight rates will be a help to freight |
| amalgamations between international freight | | | | forwarders, with the customer again being the |
| companies as freight forwarding companies look to | | | | ultimate winner as competition in the international |
| increase profitability through building economies of | | | | freight market hots up in the year ahead. |