The impact of Covid-19 has amplified pre-existing troubles in freight forwarding. Ti’s latest research reveals the global freight forwarding market could contract by 7.5% in 2020 as a result of the crisis. With the global market having limped to a contraction of 1.7% in 2019, Ti now projects second consecutive year of negative growth.
Ti’s analysis of the impact COVID-19 has so far had on the global forwarding market indicates an extremely challenging year ahead for forwarders. In particular the projections will make for tough reading for those exposed to the air forwarding market, which was already struggling amid strong headwinds from the US-China trade war, falling production in key verticals such as automotive, and a wider economic slowdown.
The new research shows that, in a best-case scenario, the impact of COVID-19 will drain 2.0% from global market value. Ti’s proprietary forecasting shows the slowdown will be broad based and relies on the easing of social and economic restrictions in the second half of the year to reinvigorate activity on both the supply and demand sides. If the public health crisis endures, however, and the lockdown measures seen across much of the world so far in 2020 remain, the fall in market value will be much steeper at 7.5%. Such a worst-case scenario would impact regional and country markets hard – under these circumstances, the US market is projected to contract by 10.8%, for example.
“2020 looks all but guaranteed to be a painful year for forwarders and the numbers here make for some grim reading. There are reasons for hope, however, with signs that Asian markets are emerging from the crisis and increasing momentum in Europe and North America behind an easing of restrictions, at least in certain sectors of the economy. The obvious hope is that this continues and that we’ll see a bounce in activity and volumes in the second half of the year,” said Michael Clover, Ti’s head of commercial development.