Freight forwarding is in the period of the fastest growth in the industry in ten years?

According to the Transport Intelligence report, the global freight forwarding market will grow by 11.2% in real terms in 2021, the highest growth rate since 2011. After a challenging year, the market value rebounded strongly to 269.55 billion euros ($285.03 billion). The Asia-Pacific market has the highest growth rate of freight forwarding, reaching 13.8%, accounting for 34.9% of the global market.

In its report, Global Freight Forwarding Market Size and Growth 2021-2026, the market data provider said that global trade hit a record high during the year as the recovery from the COVID-19 pandemic boosted demand, driving the market’s expansion. The United Nations Conference on Trade and Development said global trade totaled about $28.5 trillion last year, up nearly 13 percent from pre-pandemic levels.

In addition to the phasing out of restrictions on economic activity related to the outbreak, government support programs and economic stimulus packages rolled out in many countries remain in place, keeping demand for commodities high. Factors such as the expansion of the e-commerce industry and the rise of free trade agreements have also contributed to the growth of the global digital freight forwarding market, according to Transport Intelligence. Growth was led by air freight forwarding, which is growing at more than twice the rate of the ocean freight forwarding market, the report said.

2021 Regional Air Freight Forwarding Market Growth and Scale Proportion The yellow column represents the market size, and the orange polyline represents the market growth

Chart source: Ti

The air cargo market grew in real terms by 14.9% to EUR 121.4 billion. Throughout 2021, the growth of the air freight forwarding market is driven by strong demand for cargo and supply chain bottlenecks in sea and land transport, Transport Intelligence said. The latter has led to some shipments being diverted to air freight to solve the problem, thereby boosting the air freight market.

In the ocean freight forwarding market, growth opportunities have been lost due to insufficient capacity of shipping companies and port congestion, the report said. For example, according to Maersk, about 12%-15% of the world’s container ship capacity will be withdrawn from circulation due to congestion by 2021, and Kuehne+Nagel points out that 80% of the world’s shipping disruptions are related to North American ports. These industry-specific supply factors are hindering the growth of the ocean freight forwarding market, which will grow in real terms by 6.6% in 2021 to reach a value of EUR 148.25 billion. Seaborne demand was well above available capacity, pushing prices up by about 69.8%.

Growth and Scale of Ocean Freight Forwarding Market by Region in 2021

Chart source: Ti

Global trade growth should moderate in 2022 as growth momentum is likely to taper off. This steady but weak global economic recovery should boost the global freight market at a slower rate of 5.7% to a market of 284.87 billion euros.

The Ministry of Transport Intelligence said the forecast was more pessimistic than before, as inflation challenges intensified, the Russian-Ukrainian conflict threatened global energy and food supplies and consumer spending slowed. Consequently, the global freight forwarding market is expected to grow at a CAGR of 3.7% over the five years to 2026.

In 2021, as more cargo owners switch from sea to air, port congestion and narrowing price gaps will help the air market grow twice as fast as sea freight. The air freight market is expected to grow slightly faster, growing at a CAGR of 4.0% during the period, while the ocean freight forwarding market is expected to moderate slightly at a CAGR of 3.6% during the period.

    Get A Free Quote