Global trade volumes in the second quarter of 2020 contracted 14.3 percent, compared to the same period of 2019 – more than the drop recorded during the financial crisis between the third quarter of 2008 and first quarter of 2009.

It will come as no surprise to those active in the global forwarding sector that the market has taken a hit. Data from Ti Insight suggests that the subsequent loss in trade output has resulted in the industry contracting by 11.6 percent year-on-year for the first half of the year in real terms.

This ‘real terms’ distinction is important to highlight, said Ti. Its market sizing methodology typically measures the growth in the underlying volume of freight forwarding services provided. However, Covid-19 not only disrupted volumes, but supply chains too.

In the sea freight market, carriers blanked sailings on lanes where volumes collapsed, tightening capacity and pushing up rates. In airfreight, the scramble for space on planes ultimately led to higher rates, with forwarders working hard to fulfil the supply chain needs of shippers.

Overall, the airfreight forwarding market contracted by 15.3 percent in real terms in the first half of the year. The sharp declines in manufacturing output have been particularly damaging to volumes, said Ti.

Automotive output, for example, fell to 10 percent of normal levels in some markets during the height of lockdowns.

Comparatively, Ti continued, sea freight forwarding has been more resilient, but still saw the market contract by 7.6 percent over the first half of the year. This is more reflective of overall trade trends, with sea freight containing a broader and deeper mix of goods than airfreight.

Ti added: “Given the extent of the economic shock, very few sectors were spared from the slowdown and this has led to contracting sea freight forwarding volumes across the world.”

For the year overall, Ti projections show that the freight forwarding market will contract by 10.2 percent in 2020, with the air and sea freight markets set to show signs of recovery towards the latter half of the year.

While volumes are improving, Ti warned that recovering to pre-pandemic levels will take time and the shape of recovery remains highly uncertain.