The freight industry has seen a period of relative decline after the previous two years of almost uninhibited growth.
Customers moving goods internationally have taken advantage of a softening market, with declining prices and increased competition amongst those selling spaces across all modes of transport, according to a number of attendees at this year’s MultiModal conference.
Here several logistics and freight companies explain their thoughts for the next 12 months in freight.
Continually softening market
Georgia Gibson, a business development manager with freight forwarder Cargo Partner, noted that the market faced plummeting rates across all forms of transport:
“There’s been a massive decline in rates recently. We’ve gone from being able to sell containers at about £20,000 pounds to back down to under the £2,000 mark.”
Gibson said that the dynamic had changed from a previously white-hot market, where shipping lines and freight forwarders could dictate terms, to an environment where importers and exporters have a lot more power to set the price of moving goods
“Now it’s turned on us,” she said, “it's a lot harder to bring on new business and gain trust. I think it's all turned it into a massive people’s game: you need a lot more trust in the industry and friendships.”
Quiet for air
The sentiment is not just confined to ocean shipping.
Taz Mears, cargo charter broker at air specialist Chapman Freeborn described the plane freight market as “fairly quiet” compared to the atmosphere during the Covid-19 pandemic.
He said that the high rates during Covid “sort of became the norm.”
It’s different now, Mears said.
“You'll find that everyone's looking for work right now, it’s quietened right down.”
He added the qualifier that he felt that 2023 was shaping up to be a more ‘normal’ year, comparable to the years immediately before the Covid pandemic roiled international markets and put carriers in the driving seat.
Air freight-margins
New players entering into the air freight marketplace was also an issue affecting competitiveness for many, further driving down prices.
Paula Bellamy, managing director at Ocean Wide Logistics, described the air freight market as “challenging”, saying that many clients were searching for the best price which naturally cut into margins within the industry.
“We haven’t seen the growth in the air freight sector that we like to. Also, I haven't found airfreight carriers so responsive in giving us competitive pricing or any decent agreements.”
Mears agreed with this sentiment,
“There's a lot of new players coming into the game, the market is becoming quite saturated.”
People game
Bellamy and Gibson agreed that good relationship building is important in this difficult environment, as trust placed in them by clients enabled them to keep hold of business.
Several forwarders talked about the need to avoid the spot market and take risks by setting fixed rates for a long period of time.
Bellamy said that “bulk-buying” space was important in keeping things stable. She also said she was “concerned” about the lack of warehouse space, caused by people buying stock and trying to keep ahead of the game as an additional feature of international trade.
The future
The view of many in logistics was that this was a correction from last year’s carrier-friendly market and that rates would stabilise over the next few months.
“I don’t think we’re going to see a huge upturn or downturn,” Gibson said.
“Today, there's still so many people looking to import and export goods,” she added.