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Freight Forwarders Diversify but Their Traditional Skills are Still in Demand

Article Date

17
11
11

As the grip of the global financial crisis continued to tighten in 2009, world trade plummeted and many Western economies entered recession. This decline in world trade significantly affected the performance of the UK international freight forwarding market, which fell by 20.6% between 2008 and 2009, as the UK import and export markets declined. Despite this, world trade returned to growth in 2010 and Key Note estimates that the UK freight forwarding market grew by 20%, while the UK market for international freight services rose by 16.7%.

 

The environmental impact of freight movement is of concern and many legislative and incentive schemes are in place to help the industry reduce its carbon dioxide (CO2) emissions. EU initiatives such as the Marco Polo Programme have part funded the trial of EU standard gauge freight trains on the UK's High Speed One (HS1) line. Moving freight on this line would facilitate seamless rail movement between the UK and mainland Europe, reducing the volume of freight that is moved via road. However, legislation such as the introduction of aviation into the EU's Emissions Trading Scheme is set to not only reduce CO2 emissions, but to drive up the cost of air cargo.

 

The increased liberalisation trade within the EU has limited the role of freight forwarders, as their expertise in areas such as customs is less in demand. As a result, freight forwarders have diversified the services they offer to continue to compete in an increasingly competitive market, developing IT systems and adopting a more logistics based role. However, the emergence of new markets in Brazil, Russia, India, the People's Republic of China (PRC) and South America (BRICS) and other developing economies, will allow forwarders to increase their services within these regions.

 

The first half of 2011 has so far been a mixed one for freight forwarding. The cost of moving freight has increased despite a slowdown in world trade due to returning financial fears, which could result in limited growth for freight forwarders and the industry as a whole. Key Note forecasts that the current stagnation in the economy will result in only modest growth of 1.5% in 2011. However, Key Note forecasts that the UK international freight forwarding market will pick up in the next 5 years, increasing by 15.9% between 2011 and 2015, to £21.7bn in 2015.

 

 

View FREE Executive Summary & Table of Contents for Freight Forwarding

 

 

Press enquiries: Jack Sykes at Key Note at jsykes@keynote.co.uk or 0845 504 0452. Press/review copies of the report are available on request.