Discover the factors that will determine developments in the industry in the coming year.
London, January 18th, 2016
2016 shows signs of a moderately optimistic economic outlook. The WTO expects international trade to grow 3.9% in 2016, which is slightly higher than the 2.8% reported for 2015, but still below the average of 5% we’ve witnessed over the past two decades. Although recovery seems to be stabilised in the United States and Europe (to a lesser extent) there is still some concern about the behaviour of some emerging markets, especially in China, even though Asia will continue leading global growth. These five aspects will shape market developments in the freight forwarding sector in 2016.
Free trade agreements will accelerate international trade: the Trans-Pacific Partnership Agreement (P4) is expected to be signed in February 2016 and will facilitate free trade among 12 Pacific Rim countries (from the USA to Vietnam or Australia), which together amount for 40% of the world’s GDP. It is also expected to close the agreement of the Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States.
Freight transport rates will remain low: the weak growth in demand expected for 2016 will not be able to absorb the existing overcapacity, especially in maritime transport and also to a lesser extent in the air freight transport area. Customers will continue managing very tight budgets, meaning margins will be reduced, and freight forwarding companies will need stringent cost control and greater efficiency.
The change from the globalisation to the regionalisation of transport will be highlighted: global cargo volumes will continue losing ground in favour of the regional flow of goods. This is due to the rise of emerging countries and nearshoring, which brings production closer to the consumer to reduce transport costs. Small and medium-sized freight forwarders have a significant role to play in this new scenario where customer proximity is more important than size.
The cloud will continue reducing the technological divide: cloud based tracking and management solutions are now providing small and medium-sized freight forwarders with access to services that until very recently were only available to the big players. This trend will continue in 2016, and extend to next generation technologies providing improvements in managing transport and logistics such as Big Data, Cloud Computing and the Internet of Things.
Merging will continue, along with collaboration among independent freight forwarders: after a relatively calm period in the last few months, the major operators will start searching for new opportunities to acquire competitors. And in response to them we have the small and medium-sized freight forwarders who will continue to develop collaborative approaches to make better use of the existing capacities, reduce costs and target large accounts, for example, through the global networks of freight forwarders.
More information available at www.pangea-network.com
About Pangea Logistics Network
Based in London, Pangea Logistics Network is an International Freight Network of First Class independent Freight Forwarders with over 380 local offices in over 90 countries. Our aim is to promote collaboration between Member Companies in order to gain competitiveness on the present market. We handle 1,5 million shipments every year for 60,000 potential customers, making a total annual turnover of 2 billion USD.
Press Contact:
Sarah Bidmead, Network Manager, s.bidmead@pangea-network.com, +44 (0) 1277.800.047
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