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Issue 7 2014 - Freight Business Journal


///GLOBAL FORWARDERS Many aspire but few are chosen


Almost any forwarder and logistics company above a certain size has aspirations to be a global forwarder. But is bigger necessarily better?


FedEx: Moves into forwarding


Best known perhaps as an express ‘integrator’, FedEx has lately been developing freight forwarding services through its Trade Networks arm. This currently captures 95% of the world’s GDP, with more than 140 company-owned offices in 27 countries, says MD of International Transportation, FedEx Trade Networks Transport & Brokerage, Joseph Koslowski. Meanwhile, he says the top


ten leading freight forwarders combined hold 42.7% of the total freight forwarding market, according to Transport Intelligence


figures. This is


down slightly from 2012 when the top ten had a 44.2% share. “This indicates the market is becoming more fragmented as new entrants and niche players make their mark,” is Koslowski’s assessment. He continues: “For the


industry overall, the 2013 global freight forwarding market could perhaps be best described as one of volatility. A still weak economic


environment


combined with overcapacity within the air and sea freight markets resulted


in rate fluctuations that were difficult to


manage for forwarders.” But despite the 2013 decline,


the outlook for the global freight forwarding market is positive with a compound annual growth rate forecast of 6.7% through to 2017, he says. This growth will be led by sea freight forwarding, expected to grow 7.6%, while air freight forwarding is forecast to grow 5.8%. “However, it should be noted that this is dependent on an improving global economic environment.” FedEx Trade Networks brings


a unique set of capabilities to freight forwarding, Koslowski continues. “Sitting at the centre of the FedEx operating companies, we combine the strengths of a transportation integrator, freight


forwarder and customs


broker to offer true end-to-end solutions utilizing a wide array of transportation solutions.” The FedEx Trade Networks


team of transportation consultants “is steeped in our customers’ business. We truly listen to their needs and take a holistic and flexible approach to packaging unique transportation solutions, using whatever carrier is most efficient and cost- effective. Our experts can handle


Koslowski considers – but most forwarders do offer services globally. He points out that, through


a combination of


company-owned offices and regional service providers (there are more than 50 alliances in over 60 countries), FedEx Trade Networks covers 95% of the globe’s GDP. A forwarder can be considered


the full range of transportation needs – from sourcing and routing to handling logistics or managing a complete supply chain. We can even help address complex business issues, such as where to source products and at what cost – based on customs rates and transportation costs. To support these sophisticated challenges, we are strengthening our track and trace and predictive


modeling capabilities and are building extensive vertical industry expertise in such areas as consumer electronics, automotive and retail.” Of the top 10-25 freight


forwarders, most operate on a global basis either through owned offices, agent offices or a combination of both. Generally speaking, not all forwarders are strong in every global lane,


global with its headquarters centered in one region and no other offices, but not without a strong network or alliance of agents that can represent that forwarder and those customers it represents. “Without representation, not necessarily owned offices, in all the regions, a forwarding company cannot be global,” Koslowski suggests. Is the distinction between


forwarders, integrators and logistics companies becoming more blurred – for example, logistics companies acquiring forwarding expertise, or vice- versa? Or what used to be considered express parcels companies


developing


forwarding type services? Koslowski


argues that


‘blurred’ does not properly the relationship among services


offered by various types of companies. “In a market where the supply chain is sped up or


slowed down to meet


manufacturing, market and consumer requirements, any company that hopes to approach the market as a full-service provider of transportation services has to offer a variety of options in moving product from manufacturer to consumer. Sea freight, consolidated air freight and express air options are all part of an overall offering that customers require in today’s market. These


services are


clearly defined and typically attached to a price level, transit time and other features of service.” And he concludes: “There is


little doubt that the integrators, especially the asset-strong integrators, are in the best position to bundle the wide range of services required. Whereas the classic forwarder and logistics company can offer many services, value-adds and products, they are oſten unable to offer the small package – next day express offering of the large integrator – which keeps them well defined in the pack.”


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