Freight Forwarding Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 15,400 freight forwarders in the US arrange transportation for freight between shippers and carriers, and typically offer a combination of services spanning transportation modes. Companies can derive profits from the differential between the rate charged to customers and the rate charged by the transportation carrier. By consolidating cargo and purchasing space on a volume basis, firms secure favorable pricing. Freight forwarders may also charge flat fees for services, such as freight consolidation, break bulking, and customs clearance.
Dependence on Third Parties
As middlemen between customers and transportation providers, freight forwarding services must rely on third parties for physical transport and are typically still responsible for the timely and safe delivery of cargo.
Seasonality of Demand
Depending on the type of cargo, sales can be seasonal and cash flow uneven.
Industry size & Structure
The average freight forwarding contractor operates from 1-2 locations, employs 17-18 workers, and generates about $16 million annually.
- The freight forwarding industry consists of about 15,400 companies that employ about 272,000 workers and generate about $252 billion annually.
- The industry is fragmented; the top 50 firms account for about 33% of industry sales.
- The industry includes freight forwarders, marine shipping agents, and customs brokers.
Industry Forecast
Freight Forwarding Services Industry Growth
Recent Developments
Dec 17, 2024 - West Coast Ports Win Market Share
- The US West Coast share of total imports from the Far East has increased in 2024 but spot rates into the West Coast have fallen faster than into the East Coast since July 1, according to ocean and air freight rate benchmarking and market analytics firm Xeneta. Service reliability from the Far East to US West coast is up 25 percentage points compared to July 2023 at 67.4%. Service reliability into the US East Coast remained flat year over year at 39%, making it less surprising to see more shippers choosing to import into the US West Coast, according to Xeneta.
- Freight forwarders can expect a greater emphasis on more specific commodity descriptions of shipments coming into the US for security purposes, according to Air Cargo News. Enhanced Air Cargo Advanced Screening requirements on shipments coming into the US remain a focal point for forwarders and customs brokers. These enhanced regulations, which place stricter demands on pre-departure data submission, particularly for high-risk shipments, have required freight forwarders to work even more closely with US Customs and Border Protection and the Transportation Security Administration. Greater emphasis on descriptions is expected as the US government focuses on potential changes to de minimis thresholds surrounding e-commerce shipments.
- The global freight forwarding market is reverting to the historical trend as demand for air and sea freight forwarding services remains soft, according to the Global Freight Forwarding 2024 Report from Ti Insight. The market is contracting due to challenges arising from a global economic downturn, shifts in consumer behavior, and supply surpassing demand, which have led to a 1.3% contraction in real terms (holding prices and exchange rates constant) in 2023.
- Freight forwarding industry employment and average wages for nonsupervisory employees increased slightly during the first 10 months of 2024, according to the US Bureau of Labor Statistics (BLS). Freight forwarding services increased their prices significantly during the first nine months of 2024 before decreasing them slightly during the last quarter, according to the BLS. Freight forwarding industry sales are forecast to grow at a 4.32% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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