Freight Forwarding Services
Companies in this industry provide freight forwarding and customs brokerage services. Major companies include CH Robinson, Expeditors International, and UPS Supply Chain Solutions (all based in the US), along with CEVA Logistics (France); DB Schenker and DHL Supply Chain (both based in Germany); Kuehne + Nagel (Switzerland); Nippon Express (Japan); and Sinotrans (China).
China, Singapore, and South Korea are home to the world's busiest container shipping ports, as well as some of the busiest airports based on cargo volume, according to the World Shipping Council. Hongkong, China, the US, and Qatar are also host major international cargo hubs, according to Simple Flying.
The US freight forwarding services industry includes about 22,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $65 billion.
Competitive Landscape
Demand is driven by domestic manufacturing output and levels of international trade. The profitability of individual companies depends on efficient operations, extensive relationships in shipper and carrier networks, and industry expertise. Large companies have advantages in account relationships and access to advanced logistics technologies. Small operations can compete effectively by serving a local market, specializing in cargo transfer with specific countries, and facilitating the transport of unusual goods. The US industry is fragmented: the top 50 companies account for about a third of revenue.
Competitive Advantages:
Modern IT - The freight forwarding industry is rapidly digitizing its operations, moving records and operations that were once handled on paper to Web-based applications. Introducing new technology can be less expensive for new companies that don't have the challenge and expense of integrating legacy systems.
Established Networks - The extensive network of transportation partners utilized by established freight forwarders gives them a substantial advantage over newer companies. Large providers typically work with thousands of contracted carriers.
Geographic Reach - As trade becomes increasingly globalized, the ability to provide service in far-flung locations becomes a critical differentiator.
Companies to Watch:
Among the largest US-based freight forwarders, C.H. Robinson Worldwide has used acquisitions to expand its global operations significantly in recent years.
DHL Supply Chain, the largest freight forwarder in the world, operates in more than 50 countries.
Flexport has helped lead the digitization of freight forwarding, replacing paper manifests with sophisticated software for tracking shipments.
Products, Operations & Technology
Customs brokers add another layer of expertise by facilitating the clearing of goods through international customs barriers. Most companies specialize
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