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The world's best forwarders battle in an unstable market

By Hpanchal on September 4, 2012

The word “volatile” has become a common descriptor of the air cargo market for, it seems like, the past couple of years. No matter who is doing the talking — representatives from carriers, integrators, forwarders or shippers — everybody has been echoing the same phrases. Though the wider market has turned around in some areas, for freight forwarders, uncertainty and, yes, volatility are still very much present challenges.

In this awkward, if not quite dark, scene exist the top forwarders in the world. Ranked by Armstrong and Associates according to gross revenue and all-around tonnage (air and sea), these 25 companies represent the best of the best when it comes to international freight forwarders. Some of them rely heavily on the ocean, and a few take a more balanced approach than others, but all the busiest forwarders are on the list. From the top-of-the-pack DHL Global Forwarding to Sankyu, which handled 18,060 tonnes in 2011, many firms have stayed in the top positions all throughout the downturn and the slow recovery. (Air Cargo World has taken the original rankings and listed the companies, top to bottom, by airfreight volume.)

Dachser, which was ranked last in 2010, rose to 23rd last year on the strength of gross revenues of $5.92 million. Though still a small player in the international airfreight industry, company officials feel the seismic shifts of the market just as much as the larger firms.

In the current market, Thomas Reuter, Dachser’s managing director of air and sea logistics, is seeing less demand for the company’s services from important, established economies. This, he says, leads to a diminution of important freighter services. In spite of this, the air business is growing, with the success of Dachser’s GLOBAL program and the inauguration of its second iteration. According to Reuter, the second part of the program will coincide with new offices in 21 countries and a planned doubling of activity to 2.2 billion. The company’s strongest trade routes are China to Europe and to the U.S.

According to Reuter, Dachser recently ramped up its activities in Singapore and Malaysia, with an increased presence in Vietnam coming soon. “The airfreight market is still a very volatile business,” Reuter says. “Rates and surcharges are rising and falling within short time frames, which makes it challenging to predict stable rates, especially when it comes to tender requests.”

Though Dachser has experienced increasing success with airfreight, the path forward, Reuter says, is still rife with challenges. Cargo screening is always an issue when dealing on the international airfreight stage, and while the U.S. and EU recognition of worldwide programs has helped alleviate screening headaches a little bit, bottlenecks still exist. Fuel is also a very-present concern, as is the resulting shift toward seafreight. But even though Dachser’s path is a bit obscured, Reuter is optimistic.

“It is hard to predict the next months to come, as air and seafreight business is and was always tightly connected with the international world trade economy,” he says. “In times like these, where European economies are losing ground, where the U.S. economy was on hold due to the presidential elections, and even China starts to lower their own economic expectations, it really does become a challenging environment for air and seafreight forwarders.”

Georges Van Hove, corporate airfreight director at SDV/Bollore Logistics, saw his company clear 520,000 tonnes of activity last year, up from 500,000 tonnes in 2010. The 2011 total puts SDV at No. 10 on the list. Van Hove says the current market seems positive, but lower than last year. He’s holding out hope for a peak toward the end of the year, which could possibly mean activity mirrors 2011’s results, which, in his estimation, would be excellent. At SDV, the company is more attuned toward airfreight than some others on the list, with 35 percent of the group’s turnover dedicated toward air cargo as opposed to about 17 percent geared toward seafreight, he says.

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