International Freight Forwarding Market Analysis

International Freight Forwarding Market Analysis

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Based on the mode of transportation, the market is divided into ocean, road, air, and rail. In 2023, ocean segment accounted for a market share of over 40%. The adoption of containerization has significantly enhanced the efficiency and security of ocean freight forwarding by facilitating easier loading, unloading, and transportation of goods, thereby reducing shipping times and costs. In addition, there is a growing emphasis on sustainability within the shipping industry, with companies focused on investments in greener technologies such as cleaner fuels and more energy-efficient vessels to minimize their environmental footprint.
 

Investments in port infrastructure worldwide, particularly in emerging markets, are bolstering the capacity and efficiency of ocean freight operations. Further, improved port facilities and logistics hubs contribute to smoother and expedited cargo handling processes. Furthermore, digital platforms for booking and managing shipments are simplifying logistics for shippers and forwarders. For instance, in March 2024, CMA CGM launched its new digital solution, “eSolutions,” which provides end-to-end digital services for booking, tracking, and managing shipments, aiming to enhance customer experience and operational efficiency.
 

Based on customer, the international freight forwarding market is categorized into B2B and B2C. The B2B is expected to hold over USD 123 billion by 2032. B2B customers are increasingly shifting towards digital solutions to manage their logistics and supply chain requirements. This trend includes utilizing digital freight platforms that provide improved visibility, tracking, and management of shipments. In addition, clients often request customized logistics solutions tailored to specific industry needs. Freight forwarders are responding to these requests by developing specialized services for industries such as automotive, pharmaceuticals, and retail, each with distinct shipping requirements.
 

Security measures and compliance with international trade regulations are critical factors for B2B customers when selecting freight forwarders. They seek integrated logistics solutions that seamlessly integrate with their broader supply chain management systems. For instance, in October 2023, DB Schenker announced a partnership with SAP to integrate its logistics services with SAP's supply chain management software. This collaboration offers B2B customers a streamlined solution for managing logistics and supply chain operations. The integration aims to optimize inventory management, reduce lead times, and enhance overall efficiency.
 

Asia Pacific had a significant share of the international freight forwarding market with around 35% in 2023. Various countries, such as China, India, and emerging nations in Southeast Asia, are undergoing rapid economic growth. This expansion has further fueled increased trade activities and driven up the demand for efficient freight forwarding services. Moreover, trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) are stimulating regional trade by lowering tariffs and simplifying customs procedures. Further, the adoption of advanced technologies is enhancing the efficiency and transparency of freight forwarding operations across the region.
 

Furthermore, a significant rise in e-commerce activities has also led to higher trade volumes. As a result, there is a rising emphasis on sustainability within the logistics industry in response to these growing environmental concerns, in this region. In addition, companies are investing in eco-friendly practices and technologies to mitigate their environmental impact. For example, in May 2024, Singapore's PSA International launched new green port initiatives, incorporating electric cranes and autonomous vehicles to reduce the carbon footprint of its logistics operations. These efforts align with regulatory mandates and respond to consumer demand for sustainable freight forwarding solutions.
 

The rapid growth of e-commerce in North America, particularly in the U.S., has heightened the demand for efficient freight forwarding services to manage the substantial volume of cross-border shipments. The United States-Mexico-Canada Agreement (USMCA), effective since July 2020, has catalyzed trade among these nations. This agreement has opened new opportunities for freight forwarders by optimizing cross-border logistics and reducing trade barriers.
 

For instance, in January 2023, the United States International Trade Commission (USITC) reported increased trade volumes among the U.S., Mexico, and Canada attributable to the USMCA. It reduces tariffs on a wide range of goods traded within the region and includes provisions to simplify customs procedures and facilitate the flow of goods across borders. This highlights its positive impact on cross-border logistics and freight forwarding services.
 

Europe is witnessing notable advancements in logistics technology, including automation, digital platforms, and real-time tracking systems. The European Union's trade agreements with various countries and regions, such as the EU-Japan Economic Partnership Agreement, are enhancing international trade and boosting demand for freight forwarding services. For instance, in January 2024, the European Commission reported a substantial rise in trade between the EU and Japan after the agreement's implementation. This agreement removes or greatly reduces tariffs on most goods traded between the EU and Japan and simplifies customs procedures, underscoring its positive effect on freight forwarding services.