The international freight industry faces new challenges with rises in fuel costs and a sluggish economy worldwide. So, what are the developments we see in the international freight industry and how are they going to influence the consumer? In 2007, the worldwide freight forwarding industry stood at 116.8 billion euros, rising by just under 11%.
For four years, this was the lowest level of growth seen by the international freight industry. The slowdown was mainly triggered by the effect on the freight sector of the weak economy in the US, but with the European economy now also showing signs of trouble, freight growth is expected to slow further this year and next. The credit crunch had a huge effect on imports to the US from China, a freight market that had previously been flying high. Although this decrease in freight has been marginally offset by the rise in US exports caused by the dollar’s weakness, shipping companies are now thinking about how best to cope with stormy market conditions ahead. Checkout Freight Ratez for more info.
The good news is that freight companies are better positioned than some to ride out the coming recession as they are asset light, and forwarders are in one of the freight industries ‘s strongest positions. So, it is from the freight companies that clients can expect in the next year or two to see most creativity in the international freight industry. Customers of foreign cargo should expect to see some major changes on the horizon. If many clients prefer to make savings in this direction, we should expect to see the migration of some air freight traffic to the cheaper alternative of shipping by sea. In the ‘express’ segment of the international freight industry, this is likely to be followed by less growth as some customers tend to sacrifice freight speed for cost savings.
Inevitably, when the difficult trading conditions determine the winners and the losers in the international freight industry, some weaker freight companies will go to the wall. However, as they continue to evolve to overcome business problems, the stronger freight forwarding companies can become even stronger.