Change in the freight forwarding market is driven by shifting demand patterns, more complex and global supply chains, and an evolving customer base (as new customers from developing countries enter the market and traditional customers seek to reduce costs), to changing relationships with shippers; Forwarding becomes commoditized and switching costs are no longer relevant, this is having an impact on relationships. Size still matters in this industry – bigger forwarders can negotiate better rates and can book capacity in advance.
Globalization, outsourcing, economies of scale, sustainability and IT are trends which will also influence companies in the logistics sector. It is important and beneficial for a logistic firm to position the business in coherence with these trends. In this also the quality of the value chain is getting more important. It is not only about simply optimizing current value chains, but also about completely refreshing and updating these chains. Efficiency and effectiveness in collaboration are key for the cross-sectoral logistics industry.
Shipping one of the most capex-intensive and competitive industries. Growth in shipping services is primarily driven by economic development and trade intensity. Players in the shipping industry have limited flexibility to adjust capacity in the short-term. Price wars in order to maximize asset utilization and to secure market share. Freight rates and charter rates can change rapidly, which is further compounded by the high volatility of bunker prices as one of the key drivers of operating costs. Managing this volatility is at the heart of the shipping business. Players in this challenging environment need to leverage the growth opportunities while balancing the risks and maximizing efficiency and operational excellence.