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New figures published in Transport Intelligence's latest report, Global Freight Forwarding 2009, show the extent to which the freight forwarding market has shrunk in the first six months of 2009.
The air freight forwarding market contracted by 28% and the sea freight forwarding fared even worse with a 32% drop. The rapid reduction is placed into context by the fact that the air and sea freight markets actually grew in 2008 by 2.7% and 3.2% respectively fuelled by economic growth in the first part of the year and high fuel surcharges.
Although the crisis affecting the market is a global phenomenon, some regions performed much better than others. In the first half of 2009, for example, the Middle East air cargo market fell by just 3% whilst in the USA forwarders were faced with a 36% drop.
According to John Manners-Bell, Transport Intelligence's CEO, it will take several years before the industry recovers to previous levels. "There are signs that the industry has bottomed-out in terms of falling volumes. However indicators both within the market and in the wider economy are mixed. We believe that it will be at least 2012 before the market returns to its 2008 value."
The reduction in volumes has placed massive strain on forwarders' operations. Despite the asset-light nature of their business, none has been able to keep pace with the rapid downturn in volumes.
"The next six months of 2009 are critical to the future of the forwarding industry," warned Manners-Bell. "It is still to be seen which of the major freight forwarders has the best grip on the challenging market conditions. Those that get it wrong will be left behind when the recession finally ends."
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