Forwarders must adapt to succeed – new report


Forwarders must adapt to succeed – new report Mike King and Will Waters | Friday, 03 April 2020 The role of the forwarder is evolving rapidly, although the coronavirus pandemic has also highlighted some of the value that freight intermediaries bring to their clients, according to a new report from Logistics Trends & Insights. Print Article Email the Editor Send to a Friend Bookmark and Share Freight forwarding as we know it is dead. Long live freight forwarding.

That is one of the essential conclusions reached by logistics analyst Cathy Roberson, founder of Logistics Trends & Insights, which today launched its annual ‘Global Freight Forwarding Report’. The report examines the current state of the sector and provides a guide as to what the future holds for forwarders – a subject of renewed debate as coronavirus ravages the economic foundations of world trade.

Roberson argues that the traditional modus operandi of forwarders is now outdated. “No longer is it one of phone calls, fax machines and back and forth email correspondence,” she believes. “The importance of relationship building among select carriers to provide the ‘best’ rates and required capacity for resell has greatly diminished.”

Forwarder role evolving

Instead the role of the freight forwarder is evolving, and evolving rapidly.

“The freight forwarding market is one of evolution,” the report stresses. “Value-added services such as customs brokerage, consulting, warehousing and more are no longer value-adds but instead expectations from customers. These can no longer be considered differentiators among freight forwarders.

“Instead, freight forwarders must find other options to remain viable whether that is to focus on a niche solution such as temperature-control service offerings, e-commerce or project logistics or an industry specialization such as chemicals, pharmaceuticals or mining.”

Continued automation

According to Roberson, continued automation and inclusion in fully-encompassing platforms that manage all modes of transportation and data analytics will dominate freight forwarding in the years ahead. 

“These platforms will ultimately serve as the nucleus of 4PL service offerings,” she notes. 

Roberson expects those that succeed in the forwarding markets of the future will be able to ‘see’ and accurately measure cost and service performance, a trend that will most likely favour the largest players. 

“Freight forwarders have the skill and knowledge to oversee today’s global supply chains as more face increasing risks and barriers,” adds the report. “Forming the nucleus – the online platform – involves investments and a clear, coherent strategy. 

“As a result, consolidation in the market is likely but those that survive the shakeout will reap financial benefits.”

Nevertheless, Roberson also acknowledges that the coronavirus pandemic has also highlighted some of the value that freight forwarders bring to their clients. And with the “pandemic that is now sweeping the world and shredding supply chains, the supply chain rule book no longer applies”.

True value of a forwarder

Roberson added: “There has always been risks involved with global trade whether they are political, economic, natural disaster or something entirely different and that’s where the true value of a freight forwarder rest – guiding their clients through such turmoil by identifying the optimal trade lane, mode of transportation, the best rate, securing capacity and so on.

“However, even when there is little to no turmoil and organizations are humming along with no concerns, the value of a freight forwarder cannot be denied. For the past four years, Logistics Trends & Insights has surveyed the logistics market regarding the relevancy of forwarders. The survey results have always maintained their relevancy but with an added footnote relating to their ongoing evolution that is leading many towards a role as a lead logistics provider or 4PL.”

She continued: “Along this evolution path, we see the emergence of various options that are not necessarily replacing the freight forwarder but perhaps diminishing some the traditional tasks a forwarder is commonly known for – obtaining the best rate, enough capacity and tracking and managing the freight movement from one port or airport to another. As a result and not surprising, freight forwarders are investing in a variety of technologies as well as in value-added services to expand their reach and grow profitably.”

Rapidly changing environment

She said the market remains fairly active in terms of mergers and acquisition, and although it had slowed due to the pandemic, it will pick up once the pandemic has eased.

“Of course, a report such as this would not be complete without sizing it, and we have done so by taking a common-sense approach in utilizing trade, economic, air and ocean freight data,” Roberson noted. “However, we are not comfortable with forecasting the market at this time due to the rapidly changing environment. At best, we currently expect an overall decline in the global freight forwarding market this year with best estimates of high single digit to low double digits.”

More information about the report is available here: