Will Waters writes in the current Lloyds Loading List that the Top 20 and top 100 agents outgrown by their SME rivals last year, with those outside the top 100 achieving average increases of 3.8%” according to WorldACD data.  Sometimes data-watching is tedious and sometimes over time you glean important trends.  With the overwhelming amounts of data that we all have access to today, it’s difficult to sift through and distinguish between the meaningful and trivial.

This article talks about how while overall worldwide air cargo volumes grew by 2% last year, there was a meaningful difference in the growth from the top 100 air freight forwarders versus their smaller competitors.  The largest forwarders grew year on year at a rate of .9%, while smaller forwarders as a group grew at a rate of 3.8%.  There’s a fair bit of variation in performance among the larger players but as an overall, smaller forwarders have improved market share, especially outside of North America. We know that this is partly a story about emerging markets and the fact that the largest 3PL players are less entrenched there than in say North America and Europe.  It’s worth watching though how this dynamic plays out in terms of the unevenness of overall global growth and the very aggressive efforts for the larger 3PL players to become even larger.  We see the consolidation of the 3PL market to be oriented around two main issues: 1) corporate efficiency and the goodness that comes from consolidating and aggregating geographic footprint, and 2) the opportunity to use scale and efficiency to offer additional services to clients.

This last trend can have quite meaningful implications in corporate facility location decision-making, cargo route planning, etc.   We’re watching this unfold carefully as our client base considers changing supply chain requirements, reshoring portions of their operations, etc.  The role of the 3PL is likely to become more prominent.  We’ll talk about this more throughout the year and welcome your thoughts.

Article is below:

Top 20 and top 100 agents outgrown by their SME rivals last year, with those outside the top 100 achieving average increases of 3.8%” according to WorldACD data

The world’s largest air freight forwarders saw their market share slip last year in both revenue and volume terms, according to air freight data specialist WorldACD and the more than 60 airlines reporting their figures into its database.

The Amsterdam-based air cargo analyst, which recently announced that the worldwide air cargo volume increased by 2% in 2015, said the world’s top 20 air freight forwarders saw their combined worldwide market share decline from 44.5% in 2014 to 43% in 2015, based on their air freight revenue spend with airlines, in US dollars. In terms of air freight tonnages carried or managed, their volume share also slipped, dropping from 43% to 42%. WorldACD bases its figures on the inputs of more than 60 (mostly large) airlines that provide their full worldwide AWB data every month.

The top 10 forwarders remained unchanged from the previous years, together accounting for 32% of worldwide air cargo volume. Not only the composition, but also the ranking within the group remained the same as in 2014. Behind DHL Global Forwarding (DGF), the largest forwarders are Kuehne + Nagel, DB Schenker, Expeditors and Panalpina. K+N, Expeditors, Nippon Express, CEVA and DHL Express achieved growth exceeding the worldwide average of 2%, while DGF, DB Schenker, Panalpina, UPS SCS, and Kintetsu lagged behind.

Kuehne + Nagel and Nippon Express were the “high flyers” among the big air freight forwarding agents in terms of market share gains, “chalking up serious increases”, WorldACD said, followed by DSV, SDV, CEVA and Expeditors.

As in 2014, airlines saw the average yield realized through large agents drop more than the yields realized through the group of forwarders outside the top 100, WorldACD noted.

The differences between best and worst performers in each group were significant. In the top 10, the volume growth ranged from +7% to -10%. Among numbers 11-20, the numbers varied between +11% and -10%, WorldACD said.

Collectively, the top 100 forwarders saw growth of 0.9%, and the many thousands of forwarders outside the top 100, accounting for 43% of total business, achieved better results with an average growth of 3.8%.

This pattern was broadly consistent across the world, with WorldACD noting that the top 20 global forwarders collectively had not outgrown their smaller rivals in any of the worldwide regions, although in North America, the balance between the two groups was more or less maintained.

But this elite group of top 20 agents collectively realised lower growth, and thus lost share, in all other areas. WorldACD noted the largest difference was in Europe (+1% vs. +7%) and Latin America (-7% vs. -2%). The share of the Top 20 was largest in Europe (53%) and North America (49%), and smallest in Africa (12%) and ME&SA (21%).