Small and medium-sized forwarders under threat

08 / 01 / 2014

  • (Inset) Brandon Fried, executive director of the US Airforwarders Association

    (Inset) Brandon Fried, executive director of the US Airforwarders Association

FORWARDERS which deal exclusively with air cargo have been a rare species for a number of years now, admits the US Airforwarders Association.

Developments in the wake of the economic meltdown of 2008/9 have been changing the landscape, forcing forwarders to reconsider and adapt their modus operandi.

“Forwarders aren’t A-to-B expeditors any more. You have to have many different services in place to work in the on-line world,” remarks Brandon Fried, the association’s executive director. “Shippers don’t want transportation, they want solutions.”

There is widespread agreement that competitive pressure has increased painfully in recent years, as forwarders have been fighting over a cake that is not growing and shippers have squeezed them harder for cost reductions.

In an industry where margins were never lavish, this is threatening the survival of a mounting number of small and medium-sized players.

For most, competing on price alone is no longer an option to sustain their operation.

Moving cargo from A to B has become largely commoditised, which has disabled all but the players with huge financial muscle from going after business by undercutting the competition, one forwarder executive remarks.

Read Ian Putzger's full piece in Air Cargo News 13 January 2014 – Issue No.768