FREIGHT FORWARDING MARKET ANALYSIS

Market Size and Trends

The freight forwarding market is estimated to be valued at US$ 176.12 billion in 2024 and is expected to reach US$ 245.31 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 4.8% from 2024 to 2031.

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Freight forwarding helps manufacturers and shippers to transport their goods safely and efficiently to their customers worldwide. The industry handles a huge volume of cargo shipments on a daily basis including important and time-critical shipments.

The freight forwarding market is expected to witness positive growth over the next decade. Increasing global trade and demand for overseas goods driven by growing e-commerce is expected to boost the demand for freight forwarding services. Adoption of technology and digitization of documentation processes is also anticipated to provide opportunities for freight forwarders to enhance operational efficiencies and provide value added services to customers. Consolidation of freight forwarders is another trend being witnessed in the industry.

Globalization of Supply Chains

As international trade continues to grow exponentially, the need for efficient logistics and transportation networks has never been greater. Manufacturers and retailers are sourcing materials, components and finished goods from all corners of the globe in their efforts to reduce costs and stay competitive. This complex web of global supply chains has made the role of freight forwarders increasingly important. As companies extend their reach into new international markets and pursue multi-continental sourcing strategies, they rely on freight forwarders to expertly navigate the numerous regulatory hassles, paperwork demands and logistical challenges associated with cross-border shipments. Freight forwarders allow businesses to focus on their core operations while seamlessly coordinating the movement of goods across land, sea and air. Their expertise in customs clearance, warehousing, tracking shipments and dealing with various transport modes empowers companies of all sizes to import and export with ease. Outsourcing freight logistics to experienced providers simply makes good business sense as global sourcing becomes the norm rather than exception. This rapid globalization of supply chains serves as a major driver propelling the freight forwarding industry forward. 

Market Concentration and Competitive Landscape

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Rise of E-commerce

The explosive growth of online shopping and direct-to-consumer business models has revolutionized retail and placed immense pressure on logistics networks worldwide. Shoppers have grown accustomed to receiving purchases almost instantly due to next or two-day delivery options offered by major online retailers. This unprecedented demand for ultra-fast shipping turns the final mile of the supply chain into a major headache unless an efficient delivery infrastructure is in place. Meanwhile, traditional brick-and-mortar retailers are rushing to establish or enhance their own e-commerce channels to meet the shifting patterns of modern consumer demands. All these developments have translated into a massive rise in parcel volumes that freight forwarders are well-equipped to handle. Their experience in time-sensitive transportation, value-added services, innovative technologies, and global footprint enables e-tailers and retailers to expand their online business with confidence. Whether it's coordinating last mile delivery with carriers or ensuring overseas purchases reach customers on-time, freight forwarders are constantly upgrading their capabilities to accommodate the fast delivery speeds necessitated by the thriving e-commerce industry. This proliferation of online shopping presents a sizable tailwind propelling the freight forwarding market ahead.

Key Takeaways of Analyst:

The freight forwarding market is expected to experience moderate growth over the coming years. Demand for freight forwarding services will be driven by increasing global trade volumes and the growing complexity of international supply chains. Expanding manufacturing sectors in developing economies are resulting in larger export volumes that need skilled logistics management. Additionally, fast growth in e-commerce is widening the scope for cross-border transportation of smaller consignments.

However, market growth could be restrained by infrastructure limitations in certain countries and regions. Congested ports and outdated customs procedures add costs and introduce inefficiencies in transportation networks. Persistently high fuel prices also act as a hindrance for freight forwarders operating on thin margins. Geopolitical uncertainties and international trade conflicts pose operating challenges as well.

From a regional perspective, Asia Pacific is projected to be the dominant as well as the fastest growing market. Burgeoning trade with China and growth in intra-Asia shipments will underpin demand. North America and Europe are anticipated to remain sizable markets, although their growth rates may be lower than the industry average. Meanwhile, Latin America and the Middle East & Africa offer promising opportunities, supported by commodity exports and infrastructure investments.

In this dynamic environment, freight forwarders need to focus on enhancing supply chain visibility and customer services through technology adoption. Consolidation strategies could help larger players.

Market Challenge: Disintermediation Through Technology

Technological advancements have empowered shippers to bypass traditional freight forwarders and manage their own logistics and transportation online. This trend towards disintermediation threatens the traditional business model of freight forwarders, who must now adapt by integrating advanced digital solutions to stay competitive.

Market Opportunities: Growth of E-commerce and the Need for Enhanced Logistics Support

The boom in e-commerce has increased the volumes of smaller parcels and non-bulk shipments, demanding additional logistics support. Outsourcing of transportation and warehousing functions continues to rise as manufacturers seek flexibility. Furthermore, the market remains highly fragmented, allowing larger players to gain share through additional mergers and acquisitions.

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In terms of mode of transport, air freight forwarding dominates the market owing to the growth of time-sensitive deliveries.

The air freight forwarding segment is expected to contribute the highest share of 40.3% in 2024 owing to the growth of time-sensitive deliveries. As e-commerce sales increase globally, buyers expect faster delivery times for their purchases. This has resulted in greater demand for air transportation of goods.

E-commerce retailers rely heavily on-air cargo to meet customer expectations. Products like electronics, fashion apparel, collectibles and other high-value, light-weight items are especially well-suited for air shipping. The ability to deliver these items within a day or two of an online purchase builds customer loyalty and increases repeat business for online retailers.

Just-in-time manufacturing trends also drive demand for air freight solutions. Aircraft carry components, sub-assemblies and high-value finished goods between factories and distribution centers globally. Tight production schedules rely on the speed, reliability and customs proficiency of air logistics providers.

As online shopping continues expanding in developing markets and among new product categories, air cargo will play a crucial role in supporting ultra-fast delivery speeds. This ensures the air freight forwarding segment retains its prominent position within the industry.

In terms of services, transportation & warehousing dominates the market owing to efficient movement of cargo and interim storage.

The transportation & warehousing segment accounts for the largest segment. It is expected to account for a market share of 45.7% in 2024. Efficient movement of cargo and interim storage is fundamental to the role of freight forwarders.

Whether arranging multi-modal carrier changes for international shipments or coordinating domestic trucking, transportation lies at the core of freight forwarding operations. Along every step of the supply chain, from manufacturer to distributor to retailer, forwarders manage the physical transfer of freight.

As shipment volumes and routes grow more complex, warehousing also becomes a valuable ancillary service. Storage facilities near ports and borders provide safekeeping of cargo during customs clearance or as it awaits the next stage of transport. Specialized cold chain warehousing preserves temperature-sensitive items like food, pharmaceuticals and electronics.

As manufacturing shifts further abroad, long-distance freight between regions rises. Forwarders integrated themselves as non-vessel operating common carriers to better coordinate container shipping. Their long-term carrier relationships and freight consolidation abilities lower transportation costs.

Just-in-time principles reduced excess inventory, increasing demand for international warehousing and groupage services. Forwarders help customers optimize working capital by precisely timing freight arrivals. With greater reliance on foreign sourcing, efficient transportation and warehousing remain core to supply chain management.

Regional Insights

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North America has dominated the global freight forwarding market with a market share of 41.2% in 2024, owing to strong economic growth and international trade in the region. The presence of major global forwarding companies and headquarters of several multinational corporations in the U.S. and Canada has propelled the market growth. With high import and export volumes between NAFTA nations and other trading partners in Europe and Asia, the freight forwarding infrastructure is highly developed to support sophisticated supply chains. The massive scale of B2B operations requiring efficient logistics services has benefited freight forwarders.

A fast-growing regional market is Asia Pacific with a CAGR of 5.6%. International trade activity has risen exponentially within the region and with trading partners globally. China remains the manufacturing powerhouse and largest exporter, while other nations increasingly contribute to regional trade volumes. The continued emergence of multinationals based in large Asian economies and their extensive trade links have boosted demand for freight forwarding services. The strategic location of APAC countries along major global shipping routes amplifies the demand for options in transporting goods by sea as well as other modes. Furthermore, market growth has been fostered by the rising incomes of middle-class populations demanding greater import volumes of consumer and industrial goods.

Several freight forwarders have leveraged the opportunities in the largest and most populated region globally by establishing extensive networks throughout Asia Pacific. This allows them to offer localized understanding and services to global shippers while also supporting domestic and intra-regional trade flows. The highly competitive markets in major hubs have kept pricing competitive to appeal to price-sensitive shippers. Overall market dynamics in the fast-growing Asia Pacific region presents attractive prospects for freight forwarders able to meet demand from increasingly internationalized production and consumption patterns.

Market Report Scope

Key Developments

• In June 2023, Kuehne+Nagel, a global logistics firm, finalized an agreement to acquire Morgan Cargo, a prominent freight forwarder based in South Africa, the U.K., and Kenya, specializing in the transportation and handling of perishable goods. This acquisition bolsters Kuehne+Nagel's perishables logistics services, while also improving connectivity for customers to and from the aforementioned regions, including access to advanced cold chain facilities.
• In April 2023, DHL Global Forwarding entered into a memorandum of understanding with Turkish Cargo to expand its operations to SMARTIST, a cargo facility located at Istanbul airport. This partnership enhanced the operational efficiency for DHL Global Forwarding and contributed to Istanbul's positioning as a key global logistics hub.

*Definition: Freight forwarding refers to the logistics market that involves coordinating and executing shipping and transportation services for shipments from suppliers to customers. Freight forwarders act as intermediaries who bundle cargo from multiple clients into ocean or air freight shipments. They help arrange international shipments and manage documentation requirements as well as track shipments. Freight forwarders provide value-added services like customs brokerage, warehousing, and distribution to facilitate smoother trade flows for importers and exporters.

Market Segmentation

• Mode of Transport Insights (Revenue, US$ Bn, 2019 - 2031)
  • Air Freight Forwarding
  • Ocean Freight Forwarding
  • Road Freight Forwarding
  • Rail Freight Forwarding
•  Services Insights (Revenue, US$ Bn, 2019 - 2031)
  • Transportation & Warehousing
  • Packaging & Documentation
  • Insurance
  • Value-added Services (Customs Clearance, Transportation Tracking, and Others)
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Agility Logistics
  • Bolloré Logistics
  • CEVA Logistics (a subsidiary of CMA CGM)
  • C.H. Robinson Worldwide Inc.
  • DB Schenker
  • DHL (part of Deutsche Post AG)
  • DSV
  • Expeditors International of Washington, Inc.
  • FedEx Corporation
  • GEODIS
  • Hellmann Worldwide Logistics
  • Kerry Logistics Network Limited
  • Kuehne+Nagel Inc.
  • Maersk
  • Nippon Express Co., Ltd.
  • Panalpina (part of DSV)
  • Sinotrans Limited
  • UPS (United Parcel Service of America, Inc.)
  • Yusen Logistics Co., Ltd.
  • XPO Logistics, Inc.