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Kuehne+Nagel led the world’s top 20 freight forwarding companies with remarkable performance and significantly better profitability last year
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Transport Intelligence reports that Asia Pacific remains the largest freight forwarding region, accounting for 35.3% of the global market
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K+N’s total air and sea freight revenue increased 97.6% to €22.7 billion (US$22.43 billion) last year while DSV eased out DHL Global Forwarding from No.2 position
Switzerland-based Kuehne+Nagel International AG led the top 20 global forwarders in 2021 that performed remarkably and improved profitability significantly in extraordinary market conditions, Transport Intelligence (Ti) says in a new report.
According to Ti, the Asia Pacific remains the largest freight forwarding region, accounting for 35.3% of the global freight forwarding market in 2021.
K+N’s total air and sea freight revenue increased 97.6% to €22.7 billion (US$22.43 billion) last year as major forwarders benefited “roughly equally” from the unusual market conditions, Ti said in its October 2022 “Competitive Landscape in the Global Freight Forwarding Market” report.
Denmark’s DSV Panalpina rose to No.2 with total revenue surging 79.7% to €17.6 billion, nudging DHL Global Freight Forwarding to third place despite the Germany firm’s revenue growing 44.5% y-o-y to €15.8 billion, said the report.
Rounding out the top five were Germany’s DB Schenker, whose revenue rose 57.5% to €12.96 billion in 2021, and US forwarder Expeditors, whose revenue climbed 66.5% to €10.4 billion.
“All major forwarders have benefited roughly equally from the unusual market conditions, with all companies under review achieving significant revenue gains in 2021,” said Ti analysts Marta Chiriatti, John Manners-Bell, and Thomas Cullen, who wrote the report.
“In a year marked by fallout from the global Covid-19 pandemic, freight markets returned to growth in volume terms, but supply chain bottlenecks, capacity constraints and widespread congestion all contributed to freight rates booming.”
Ti said inflated freight prices due to capacity shortage contributed strongly to the revenue increases in 2021, driven by a sharp rebound in economic activity and trade, container shortage, a dearth of drivers and dock workers, and US and China port congestions. Global demand rebounded especially in the manufacturing and retail sectors, triggering a race for ocean and air freight capacity to replenish inventories across global supply chains.
Among the top 10, K+N and DSV Panalpina posted the strongest revenue growth despite the disruptions that have plagued supply chains over the past two years, Ti said.
“K+N fully benefited from integrating Apex International (the 17th largest air freight forwarder in 2020). Meanwhile, DSV’s integration of Panalpina, followed by the acquisition of Agility, allowed the company to rise to second place and ahead of DHL Global Forwarding for the first time,” Ti said.
K+N topped last year the sea freight forwarding sector, which, Ti says, has always been the company’s strength. Its sea freight revenues surged 91.4% compared pandemic-related setbacks in 2020, while the rest of the top five players by revenue were some way behind.
Sinotrans and DSV’s sea forwarding businesses are around two-thirds the size of K+N by revenue. In third place was DHL Global Forwarding, which made moves in 2021 and followed its acquisitive peers into the M&A markets.
In terms of volume, K+N was the largest sea freight forwarder in 2021 with volumes rising 2% and staying some 830,000 TEUs higher than second-placed Sinotrans.
Sinotrans had the second-highest volume in 2021 across the top 20 freight forwarders analysed. DHL and DSV Panalpina were third and fourth. DB Schenker rounded out the top five despite seeing volumes dip 2.4% in the year.
In 2021, a total of 11 of the top 20 global forwarders recorded volumes of over 1 million TEUs during the year, compared with 2020, when eight forwarders passed that threshold.
K+N topped the air freight forwarding revenue ranking with just slightly above €10 billion in 2021. DHL Global Forwarding was in second position. DSV was in third and DB Schenker ranked fourth, having handled 31.4% more cargo while ocean forwarding saw a 2.4% reduction.
There were 16 air freight forwarders in 2021 with record revenues above €1 billion. Expolanka, a Sri Lanka-based 3PL and part of Japan’s SG Holdings, rounded out this group via a 131% rise in revenue.
The report said gross profit as a proportion of revenue has fallen, but it has risen in absolute terms as the price of air forwarding has gained in absolute terms. It said the market’s disarray has created unusually fresh opportunities for forwarders.
The top 20 global forwarders had the possibility of leasing cargo aircraft and then selling the capacity to existing customers on a shared-user or, occasionally, a dedicated basis. This appears to have been lucrative for both aircraft operator and forwarder.
The most attractive regions for M&As Europe are Asia Pacific and the Middle East and North Africa while the US is the second most attractive market.
The Middle East and North Africa is the third most attractive region in the freight forwarding sector, being a refuelling point for air freight carriers and shipping lines moving between Europe and Asia for many years.
