The Future of Freight – Industry Dynamics and Solutions for the Freight Forwarder


The Future of Freight


Current Industry Dynamics for the Freight Forwarder

A recent report from the Freightos Research Series highlighted the current influencers and dynamics in the freight forwarder sector and it also looked at some of the solutions which are evolving to address the issues that are arising.

The research was undertaken through a questionnaire completed by 92 professionals operating in large-scale freight companies across the globe. It was independently verified and participants represented key influencers in the industry.

It’s an interesting read for anyone in the business – customers and suppliers alike so we’ve summarised it, outlining the challenges we are facing and potential solutions given in the Report.

Freight Forwarder Challenges

The report highlighted three key factors that are changing the dynamics of the industry and these include

  • A Reduction in Margins
  • An Increase in Customer Expectations
  • The Emergence of New Players

The research found that core freight services were being commoditised, thus reducing the margins for suppliers. And despite the tighter margins, customers are becoming more demanding, requiring more flexible, responsive services. In the meantime, new market entrants are emerging and bring new technologies which disrupt the market for established payers. Though the report does indicate that change – while it may be radical – can be slow to happen, a little like trying to turn around a container ship!

There is good news for a smaller, hands-on family run business like our own, as the survey found that senior freight decision-makers rank two factors as being the most important when choosing a supplier – reliability (95%) and cost (85%) – and specialists players like Cargocare have an excellent reliability record and can be nimble on cost.

Freight Forwarder Market Set To Embrace Change

The research outlined three opportunities that companies could exploit to be successful into the future.

New Technologies

While goods will continue to be moved by the current modes of transport, the technology that moves information is being transformed; data will become a hugely significant basis for intelligence in the logistics market, increasing efficiencies and assisting in cost reductions. So technology is set to improve service levels and cut cost. Cargocare continually invests in new technologies, in new vehicles and in team training and we will be embracing any technology where we can see a business benefit; both for ourselves and our customers.

New Added Value Services

The report suggests that the freight forwarder may need to consider selling additional services, to supplement the reduction in margins of their core offering. Cargocare has had a long-standing interest in Last Mile logistics and this is one of the areas where we feel we can offer clients real added value. We provide an office delivery and equipment installation service for example and this has proven highly beneficial for clients like Ricoh for example.

Growth – Organic and M&E

One way to protect businesses against significant change is to strengthen them through growth. While Mergers & Acquisitions were flavour of the month in the past, the report states that 50% to 80% of all mergers fail and the executives who responded to the survey were not wholly enthusiastic about mergers. For Cargocare, organic growth is our focus; with a number of members in the family actively involved in the business; we have every incentive to ensure an excellent customer service will drive an increase in business levels into the future.

Cargocare – A Safe Pair of Hands

We’ve been in business since 1983 and we’ve worked through many buoyant as well as challenging times in the freight forwarder market. To a large extent this report reflects exactly what we are all experiencing on the ground. In Part 2 of this article, we’ll look at the solutions proposed to address the challenges presented to the freight forwarder by the current environment. So tune back in shortly! And if you do have freight any requirements we can help you with – please do call.