Executive Summary
The UK freight forwarding market in 1996 was estimated to be worth
£7bn. The industry has grown significantly over the last 3 years, fuelled
both by the UK's recovery from recession and strong international trade flows.
However, profit margins remain slight due to structural weaknesses within the
industry. These have been exacerbated by the recent entry of new firms, such as
airlines and shipping companies, into the freight forwarding market.
Many freight forwarders have expanded the range of services they provide to
include storage and warehousing, packing and order processing. The driving
force behind this change has been that both forwarders and carriers have
realised that companies which are trading internationally, want to work with
organisations which can provide a full range of logistics services and, if
necessary, manage their entire supply chain. As a consequence, it is no longer
possible to regard freight forwarding as a separable function, but more as a
single leg in an integrated transport process.
At present, it is fair to conclude that freight forwarding is an industry in
transition. Advances in information technology (IT), such as the development of
the electronic data interchange (EDI), are offering ever greater possibilities
for reducing the length of the supply chain. The growing importance of
efficient supply chain management has been given further impetus by the greater
competitiveness of the business environment. At the same time, management
philosophies such as just-in-time (JIT) and Quick Response, are being
introduced more widely in order to secure the twin objectives of improved
service at lower cost.
Over the next 2 or 3 years, the industry's top-line performance will continue
to be relatively strong, with favourable economic conditions in the UK (which
will raise domestic demand for imports) being somewhat counter-balanced by weak
demand in continental Europe (which will reduce demand for UK exports).
Nevertheless, industry profitability will remain depressed. It is likely that
this will lead to industry consolidation, as economies of scale -- in terms of
both capital and expertise -- become more critical. Those firms which can offer
both a global service and a wider range of value-added services, are likely to
succeed at the expense of the middle-ranking firms, with smaller operators left
to provide niche services to a limited customer base.
Tenth Edition 1997
Edited by Simon Howitt
ISBN 1-85765-663-6
|
If you are interested in further information about the full Keynote report, including price and how to buy, please complete the following form. You will be contacted by Keynote who will provide you with the information you require.
Denotes a required field.
