Globalization and renewed production will boost demand for freight forwarding agencies
Los Angeles, CA (PRWEB) June 09, 2012
The http://www.ibisworld.com/industry/default.aspx?indid=1209 &partnerid=prweb [Freight Forwarding Brokerages and Agencies __title__ ] industry transports goods using third-party trucks, planes, ships and railcars. Most revenue is generated by firms acting as middlemen between shipping customers and third-party transportation carriers. As a support industry, operators are vulnerable to the health of upstream industries, according to IBISWorld industry analyst Lauren Setar. Consequently, participants need to maintain strong business and customer contacts. Additionally, if employees demand higher pay, industry participants must successfully pass this cost on to consumers or face smaller profit margins.
During times of strong economic growth, the demand for transportation services grows as consumers and businesses purchase more products. This growth in demand increases shipping tonnage, which raises industry revenue. Conversely, slow economic activity leads to a reduction in fees and trade value as the demand for transportation diminishes. The http://www.ibisworld.com/industry/default.aspx?indid=1209 &partnerid=prweb [Freight Forwarding Brokerages and Agencies __title__ ] industry's sensitivity to economic cycles was highlighted in 2009, when revenue dropped by 18.2%, Setar said. During that year, the Great Recession decimated global trade, business activity and consumer consumption. Industry performance suffered as a result. Conditions recovered considerably in 2010 and 2011, and revenue is estimated to grow another 6.8% in 2012 to $51.0 billion. As a result of these fluctuations, revenue has increased an average of just 0.9% per year over the five years to 2012. Prior to the recession, industry participants benefited from strong international trade, which caused revenue to increase markedly over the period. The rise in trade activity was supported by a strong US economy and increased outsourcing activity as manufacturers and other businesses moved production of goods overseas to save costs and improve profitability. At the same time, the industry benefited from a movement toward just-in-time logistics, an inventory strategy that businesses use to reduce in-process inventory and carrying costs. This factor increased demand for transportation brokerage services.
Greater globalization and international trade is expected to drive future industry growth. As the economy recovers and international trade improves over the next five years, the industry is expected to continue growing. During this period, revenue is forecast to increase. Additionally, the number of industry firms and employees will likely grow to handle the increasing number of shipments due to growth in trade. The Freight Forwarding Brokerages and Agencies industry is estimated to have a low level of concentration, as the top four players are expected to account for less than a fourth of industry revenue in 2012. For more information, visit IBISWorld’s http://www.ibisworld.com/industry/default.aspx?indid=1209 &partnerid=prweb [Freight Forwarding Brokerages and Agencies __title__ ] in the US industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry arrange the transportation of freight between shippers and carriers. These firms are usually known as freight forwarders, marine shipping agents or customs brokers. They offer a combination of services that span many modes of transportation.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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