The new face of the logistics market - Redlines Group

The new face of the logistics market

The new face of the logistics market
The financial performance of Freight Forwarders, impact of rates hikes, revenue growth and market mergers. 

The international logistics market is taking on a new face due to the high billings achieved during the pandemic, added to an expansion strategy through mergers and acquisitions, as indicated by the report “Competitive Landscape in the Global Freight Forwarding Market” by Ti Research, from the company Transport Intelligence (a logistics market research company). This report focuses on the financial performance of shippers during 2021, registering that out of a total base of 20 freight forwarders, both by profits and volume, Kuehne+Nagel came in first place with a year-on-year profit increase of 91.4%, with special emphasis on the maritime logistics business, despite the fact that the increase in its volumes was barely 2%, followed in second place by Sinotrans with a volume of 830 thousand TEUs and DSV in third place by profits. “In 2021, a total of 11 freight forwarders registered volumes above 1 million TEUs during the year. In 2020, only eight companies passed the 1m TEU mark”, according to the report. 

In the air cargo category, the Swiss company, Kuehne+Nagel led over €1 billion, followed by DSV. DB Schenker is in third position thanks to the highest fares and the increased demand for charter flights. “In 2021, 16 air freight forwarders recorded profits of over €1,000 million”, also highlighting two major trends regarding air volumes: the loss of market share of DHL Global Forwarding Freight and the increase in market share of DSV and Kuehne+Nagel, due to its acquisitions of Panalpina and Apex Logistics, respectively. 

This being the current scenario, despite the high profits and rates, the cost of maritime and air transport have increased, due to the fact that environmental standards and the value of fuels have suffered increases, reducing profit margins. “The revenue-to-profit ratio has decreased, as both prices and costs have increased in absolute terms”. Considering the above, the commitment to consolidate the logistics market could redefine the competitiveness of the sector.

January 17, 2023
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