Tuesday, May 24, 2022
Home3PL/4PLGlobal freight forwarding market grows 11.2% to US$285B

Global freight forwarding market grows 11.2% to US$285B

  • Global freight forwarding market grows 11.2% in real terms during 2021, the fastest expansion in a decade
  • Air freight forwarding powers growth in 2021 as sea freight forwarding battles low capacity and port congestion
  • Inflation, the war in Ukraine and dwindling consumer confidence among factors providing headwinds to growth prospects

The global freight forwarding market grew 11.2% in real terms in 2021, its fastest growth rate since 2011, taking the market value to €269.55 billion (US$285.03 billion) in a strong bounceback after a year of challenges, Transport Intelligence reports.

The market’s expansion was driven by global trade reaching record highs during the year as recovery from the Covid-19 pandemic boosted demand, the market data provider said in its report, “Global Freight Forwarding Market Size & Growth 2021-2026.”

The United Nations Conference on Trade and Development said global trade totalled around $28.5 trillion last year, an increase of almost 13% relative to pre-pandemic levels.

As well as the phasing out of pandemic-related restrictions on economic activity, government support schemes and economic stimulus packages introduced in many countries remained, keeping demand for goods at elevated levels.

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, Ti said. The report said growth was led by air forwarding, which expanded at more than double the sea freight forwarding market.

With a real growth rate of 14.9%, the air freight market reached a value of €121.4 billion. Throughout 2021, the growth in the air freight forwarding market was driven by strong demand for goods as well as supply chain bottlenecks in sea and land transport, Ti said.

The latter has led to some cargo migrating to air freight to get around the problems, providing a boost to the air freight market.

In the sea freight forwarding market, growth opportunities were lost due to a shortage of carrier capacity and port congestion, the report said.

These sector-specific supply factors held back growth in the sea freight forwarding market, which grew 6.6% in 2021 in real terms, to a value of €148.25 billion. Demand for sea freight was considerably higher than available capacity, pushing prices up around 69.8%.

As growth momentum drivers could abate gradually, global trade growth should moderate in 2022. This steady but weakened global economic recovery should drive the global forwarding market growth at a slower pace of 5.7% to a market value of €284.87 billion.

Transport Intelligence said forecasts are more pessimistic than previously as inflation challenges intensify, the war in Ukraine threatens global energy and food supplies, and consumer spending slows. As a result, the global freight forwarding market is expected to grow at a 3.7% compound annual growth rate over the five years to 2026.

The air forwarding market is forecast to grow slightly faster, expanding at a 4.0% CAGR over the period, while the sea forwarding market is expected to expand slightly less quickly at 3.6% CAGR over the period.

Increases in cross-border e-commerce do, however, provide a bit more optimism, along with the return of capacity via passenger flights after Covid restrictions are ended.

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