The Future Freight Forwarding Market Trends for Forwarder Success in 2022
The impact of the freight forwarders is far-reaching in the world of local and global shipping. From supply chain logistics to shipping volume to e-commerce, the freight forwarding market keeps things moving along and can greatly influence demands and trends in the industry.
With a global freight forwarding market that is valued at $192.50 billion in 2021, and is projected to reach $285.15 billion by 2031, according to Allied Market Research, it doesn’t hurt to have such an extensive reach that can propel the industry through unknown waters and into a profitable world.
Online shopping has been around for decades, but ,during the pandemic it became the dominant method that consumers used to obtain their goods. When many businesses were closed for in-person shopping, more and more consumers opened their eyes to the benefits of e-commerce. Almost anything they needed could be ordered with the click of a button from the safety of their own home. During the second quarter of 2020, as COVID-19 spread globally, the quarterly e-commerce revenue in the United States reached $200 billion for the first time in history. Even after the easing of some COVID-19 restrictions, that trend did not wane: In 2021, retail e-commerce sales amounted to approximately $4.9 trillion worldwide.
The increases in sales have resulted in greater demands placed on retailers and freight forwarders to ship items on-time. As more products are shipped directly to consumer homes, freight forwarders must respond by expanding their network coverage and carrier capacity to meet customer demands.
There is also an increase in the number of physical touches of each load that shippers need to be concerned with when it comes to delivery. Consumers have come to expect that with online shipping, shipping costs should be low, and should arrive on-time and without damages.
From clothing to groceries, electronics and technology products, online retail sales have accounted for 10% of total retail in the United States. Based on consumer trends, the future of the freight forwarding industry is likely to experience a notable expansion in the next few years. One forecast expects e-commerce sales to grow by 50% over the next four years, reaching about $7.4 billion dollars by 2025. These expected increases and the shifting trends in online shopping, will increase demand on freight forwarders to come up with cost-effective solutions to handle those increases.
With this historic boom of e-commerce shopping and the hurdles that come on the back of it, the freight forwarding market is in need of ways to handle the additional strain and stress. That’s where automation can help freight forwarders in many ways by providing speed, scalability, adaptability and predictability to help streamline efficiencies and augment rising transportation costs.
Automation gives companies an unprecedented level of visibility onto their supply chain that helps eliminate time consuming manual processes that exist in more traditional systems. All of the important invoice and record keeping data for each shipment can be found online in a digital format, allowing freight forwarders instant access to their information For instance, automation can identify areas where shipping speeds need optimization. No more time will be wasted trying to track down details, saving money on unneeded manpower.
With the rise of e-commerce, another key benefit to automation is being able to rapidly assess scalability. The rise of online shopping has dramatically multiplied the number of delivery destinations and created more complications for freight forwarders. With more details to be accounted for, automation is vital to staying on top of those changes by making them more easily recognizable.
For freight forwarders and shipping managers, automation makes it much easier for companies to optimize their supply chains and help lower operational costs.
Automation also provides vital information to help predict future trends. It can help freight forwarders adjust to rising demands, help businesses plan for peak shipping seasons and forecast issues that could arise. Automation makes it easier to see areas that can benefit from prediction, such as what type of shipper would be most efficient for a certain product or destination or what companies are less likely to hold a product in their warehouse longer. Past experiences can help steer clear future products from the same fate.
There’s no arguing that trade volumes are increasing and will likely continue to increase over the next few years. According to Valuates Reports, in 2021,the global freight forwarding market size is about $186 billion, it will mark a compound annual growth rate (CAGR) of 3.3% in the forecast years till 2028. Those increases will put greater demand on forwarding services and necessitate working with more domestic and international partners.
International trade volumes are what fuels the freight forwarding market. Take, for example, the Asia-Pacific freight forwarding market. It is expanding quickly with China accounting for the majority of the market. Globalization has caused a massive increase in international trade, and complex trade agreements that are difficult to navigate. Knowing how to deal with trade agreements and governmental regulations is crucial to the relationships between shippers and carriers and to determining how lucrative the relationship will be.
The World Trade Organization (WTO) reported the total volume of global merchandise trade increased by 8.0% in 2021, and world exports of intermediate goods increased in the third quarter of 2021, with a sharp increase in the trade of medical items and metal products across all regions. With totals continuing to increase across the planet, a diligent focus needs to be maintained on trade relationships, foreign freight forwarding trends and foreign logistics as well as consumer demands.
Another concern in the freight forwarding market is the changing shipping landscape. More items to ship means more people needed to move those goods, which includes office staff, warehouse workers, operations coordinators, and logistics specialists. More employees are needed, but more importantly quality employees that can be retained. More carriers are also needed to provide transportation for companies. According to the American Trucking Association, there are approximately 3.6 million truck drivers in the United States.
Another area that sparks concern for freight forwarders is the customs and shipping regulations that they need to know and follow. Here are some of them organizations that control shipping:
For freight forwarders to successfully evolve alongside a changing consumer landscape, they need to integrate technologies that help eliminate inefficiencies and gain visibility on their data. Expedock is the reliable solution that freight forwarders count on to help optimize payroll records and other data points. Expedock ensures their customers an outstanding 99.97 percent accuracy guarantee on data entry. With its technology, Expedock’s software aids shippers by using automation to replace inefficient manual procedures. It also allows for the combining of all physical and digital data sources into one platform. For instance, inaccurate billing is costing freight forwarders millions of dollars each year and automation technology can help solve that challenge by identifying and resolving them in real time. Expedock also helps companies make improvements in areas such as supply planning, warehouse management and route optimization. Freight forwarders that embrace automation software like Expedock’s, gain the tools they need to help streamline their companies and better prepare themselves for shifting trends they can adapt to that will assure a prosperous long-term future.