July 1 - Transport Intelligence's (Ti) new Global Freight Forwarding 2016 report suggests that while the market is estimated to have contracted by 1.6 percent in 2015, forwarders' revenues were not hit as hard as you might think.
Although both air and sea freight markets contracted due to continuing overcapacity, Ti reports that sea freight suffered the most, contracting by 2.8 percent in nominal terms.
The oil price collapse and excess capacity drove carrier rates into the ground, but this did not seem to impact freight forwarders' revenues too drastically, stated the report.
The systemic impact of low global oil prices has been a double edged sword for freight forwarders, says Ti. While some have been able to increase their profit margin, others have taken a substantial hit to revenues as a result of declining demand for industrial projects.
Following the acquisition of UTi by DSV, the Danish forwarder climbed the sea freight forwarding ranks, with a significant increase in estimated revenues.
Ti economist David Buckby said: "Looking ahead, it would be surprising if there were no further significant deals in the coming years to alter the landscape of the market even more. Further consolidation seems inevitable."