Global Freight Forwarders Increase Profits Against Maximum Decline in the Volume of World Merchandise
The Loadstar reports that according to Transport Intelligence (TI) the coronavirus pandemic has resulted in a 11.6% decline in air and sea freights over the previous year.
In the first half of the year, the global air cargo market shrank by 15.3%. Despite the signs of global economic recovery at the beginning of the second half, the annual decline is predicted by 13,9%. The uncertainty arises from a sharp decrease in the freight capacity on passenger aircrafts, which normally carry half of all the cargo. TI believes that passenger flights are unlikely to recover to pre-pandemic levels in the foreseeable future.
The shipping market was a little stronger with a 7.6% decrease in the first half of the year. TI forecasts a decline of 6.4% by the end of the year. Despite the growing demand all over the world, TI warns of serious risks still existing in the industry.
The overall volume of world trade decreased by 14.9%, which is more than during previous global financial crises.
At the same time, according to a survey of six global forwarders (DHL, DB Schenker, Expeditors, K&N, Agility and Damco), their profits have increased over the previous year. The traffic volumes and revenues may differ greatly for some companies. For example:
- Kuehne + Nagel – the traffic volumes decreased by 15.5%, while their revenues increased by 1.4%;
- Expeditors – -9% and + 47.2%, respectively
- Damco – -11.2% and + 63.2%, respectively.
TI notes that certain operators take advantage of order cycles during inventory management operations, while serious risks related to the second wave of the pandemic and new quarantine restrictions remain.
In the first half of 2020, TELS Group of Companies maintained a positive trend both in the number of transportation requests (+ 5%) and in the revenues (+ 6%).