WFA GLOBAL BEST IN CLASS INDEPENDENT FREIGHT FORWARDING NETWORK

The World Freight Alliance has been named the benchmark Independent Freight Forwarding Network globally. The announcement comes as a result of the Institute’s preliminary findings from its research study Independent Freight Forwarding in Global Logistics. The purpose of the research is to investigate the increasing trend by Beneficial Cargo Owners (BCO’s) to outsource the management of their global freight and logistics requirements to independent freight forwarders.
In 1996, 75% of all sea freight volumes were booked directly with carriers, today that number has dropped to 59% and is expected to go below 50% by 2020. Even more remarkable is that it is independent freight forwarders that will enjoy a greater market share of this growth than multinational 3PL’s at 30%.

This switch away from carriers to forwarders is being driven by three key factors:

1. The increasing complexity of global supply chains
2. The increasingly commoditized nature of the carriers offering.
3. The increasing ability by Independents to meet BCO’s demands

Preliminary findings from the research indicate that one of the key drivers prompting BCO’s to work with independents is their provision of personalized bespoke services combined with access to global independent freight forwarding networks. Such is the significance of network membership for BCO’s in choosing an independent, the Institute’s final report will include a comprehensive overview of how such networks operate. To date there has been very little in the way of research on how successful freight forwarding networks operate. As a result BCO’s and freight forwarders have access to very little information when evaluating the market place. The Institute will address this knowledge deficit in its final report.

The Institute’s approach is to first identify a benchmark network to research and for this the Institute has chosen the World Freight Alliance (WFA)
Commenting on today’s announcement, Kieran Ring CEO at the Institute said:

“I am delighted to present the World Freight Alliance with the Institute’s accreditation ‘Global Best in Class Independent Freight Forwarding Network’ The Institute have been aware of the alliance since its foundation in 2003 and have been impressed with how the network has developed.

WFA members demonstrate an exceptional level of commitment to network relationships. This has led over time to the development of interdependent activities, increasing the level of mutual productivity and resulting in excellent service for BCO’s.

Collaboration is the hallmark of Best in Class and the Institute is excited to be afforded the opportunity by the WFA to now go deeper in our research and provide readers with a unique insight into the development of an international network of regionally independent freight forwarders.

Our final report will enable both BCO and freight forwarder to determine the hallmarks of an efficient global independent freight forwarding network. I look forward to working with the WFA”

Commenting on today’s announcement, Tommy Kelly Chairman of the World Freight Alliance said:

“I would like to thank the Institute on behalf of the entire network for bestowing “Best in Class” status on the WFA. We have been together in one form or another for almost 21 years and have remained committed to our founding principles.

Collectively our group represents some of the world’s best and longest established organizations in the business. Each and every member has a reputation for local knowledge and expertise capable of offering a full suite of services including freight forwarding, customs clearance, logistics and warehousing, fiscal representation and express delivery services.

We guarantee a standardized level of excellence in all regions. Our goal is always to partner with other experienced companies to provide a seamless service offering across the world. The WFA looks forward to working with GIL in the next stage of the research process”

WFA GLOBAL BEST IN CLASS INDEPENDENT FREIGHT FORWARDING NETWORK

The World Freight Alliance has been named the benchmark Independent Freight Forwarding Network globally. The announcement comes as a result of the Institute’s preliminary findings from its research study Independent Freight Forwarding in Global Logistics. The purpose of the research is to investigate the increasing trend by Beneficial Cargo Owners (BCO’s) to outsource the management of their global freight and logistics requirements to independent freight forwarders.
In 1996, 75% of all sea freight volumes were booked directly with carriers, today that number has dropped to 59% and is expected to go below 50% by 2020. Even more remarkable is that it is independent freight forwarders that will enjoy a greater market share of this growth than multinational 3PL’s at 30%.

This switch away from carriers to forwarders is being driven by three key factors:

1. The increasing complexity of global supply chains
2. The increasingly commoditized nature of the carriers offering.
3. The increasing ability by Independents to meet BCO’s demands

Preliminary findings from the research indicate that one of the key drivers prompting BCO’s to work with independents is their provision of personalized bespoke services combined with access to global independent freight forwarding networks. Such is the significance of network membership for BCO’s in choosing an independent, the Institute’s final report will include a comprehensive overview of how such networks operate. To date there has been very little in the way of research on how successful freight forwarding networks operate. As a result BCO’s and freight forwarders have access to very little information when evaluating the market place. The Institute will address this knowledge deficit in its final report.

The Institute’s approach is to first identify a benchmark network to research and for this the Institute has chosen the World Freight Alliance (WFA)
Commenting on today’s announcement, Kieran Ring CEO at the Institute said:

“I am delighted to present the World Freight Alliance with the Institute’s accreditation ‘Global Best in Class Independent Freight Forwarding Network’ The Institute have been aware of the alliance since its foundation in 2003 and have been impressed with how the network has developed.

WFA members demonstrate an exceptional level of commitment to network relationships. This has led over time to the development of interdependent activities, increasing the level of mutual productivity and resulting in excellent service for BCO’s.

Collaboration is the hallmark of Best in Class and the Institute is excited to be afforded the opportunity by the WFA to now go deeper in our research and provide readers with a unique insight into the development of an international network of regionally independent freight forwarders.

Our final report will enable both BCO and freight forwarder to determine the hallmarks of an efficient global independent freight forwarding network. I look forward to working with the WFA”

Commenting on today’s announcement, Tommy Kelly Chairman of the World Freight Alliance said:

“I would like to thank the Institute on behalf of the entire network for bestowing “Best in Class” status on the WFA. We have been together in one form or another for almost 21 years and have remained committed to our founding principles.

Collectively our group represents some of the world’s best and longest established organizations in the business. Each and every member has a reputation for local knowledge and expertise capable of offering a full suite of services including freight forwarding, customs clearance, logistics and warehousing, fiscal representation and express delivery services.

We guarantee a standardized level of excellence in all regions. Our goal is always to partner with other experienced companies to provide a seamless service offering across the world. The WFA looks forward to working with GIL in the next stage of the research process”

THE ROLE OF THE INDEPENDENT FREIGHT FORWARDER IN GLOBAL LOGISTICS

The Global Institute of Logistics “The Role Of The Independent Freight Forwarder In Global Logistics” report which is to be published in October 2016, has come about in response to the increasing trend by Beneficial Cargo Owners (BCO’s) to outsource the management of their container traffic to independent freight forwarders.
The independent freight forwarding sector is now more vibrant and successful than ever, despite the global economic woes of the past few years. The rise of the independent agent has now been borne out by a whole range of statistics and data that prove that far from shrinking, the independents are growing faster and taking market share from the multinationals.

Latest figures from Drewry show that 41 per cent of all ocean freight is now controlled by 3PLs or forwarders and by the end of the decade analysts are predicting that the market share will rise to 50 per cent – a remarkable switch in business practice by BCO’s over the past two decades. 20 years ago some 75 per cent of all sea freight volumes were booked directly with carriers. Even more remarkable is that it is independent freight forwarders and not multinational 3PL’s are expected to make up the lion’s share of this total at some 30 %

This trend by BCO’s to outsource the management of their container traffic to independent freight forwarders, is being driven by increasing frustration with the lack of service, price volatility, schedule unreliability and onerous credit terms experienced in dealing directly with carriers in the sea freight industry.

Carriers due to the huge downward pressure on container rates (largely due to their own misguided strategies) are being forced to increasingly commoditize their product. As a result carriers are increasingly incapable of meeting shipper’s needs through direct relationships as they lack the end to-end service supply chain capabilities, focusing instead almost entirely on cost. Sales and customer service teams have been slashed as the fight to the bottom on rates continues. The advent of super alliances has further eroded the personal interfaces between the shipping lines and the end customers.

This move away from direct booking with carriers by BCO’s is a great opportunity for independent forwarders to gain significant new business and volumes. For the logistics industry this is also a positive development and will help to further integrate the global supply chain.

So what exactly is the state of the independent freight forwarding market at this important juncture and more importantly how is the segment responding to this increasing demand from Beneficial Cargo Owners (BCO’s) for their services?

These are the questions that our research will answer and in so doing provide much needed insight into what BCO’s can expect from the sector and more importantly what independent freight forwarders need to do to take advantage of these new more profitable opportunities.

The research program will take almost 2 years to complete (2015-17) and will publish its preliminary findings in June 2016. Interim findings are leveraged to give final direction to the research process and responds to intelligence gathered in the process to date.

BCO’S ARE INCREASINGLY WORKING WITH INDEPENDENT FREIGHT FORWARDERS

The preliminary findings from the report which is to be published later this year confirms that Beneficial Cargo Owners (BCO’s) are switching the management of their global freight and logistics requirements away from carriers and multinational 3PL’s to independent freight forwarders.
In 1996, 75% of all sea freight volumes were booked directly with carriers, today that number has dropped to 59% and is expected to go below 50% by 2020. Even more remarkable is that it is independent freight forwarders that will enjoy a greater market share of this growth than multinational 3PL’s at 30%

The findings identifies three key drivers for this development:

• The growing complexity of global supply chains
• The increasingly commoditized nature of the carrier offering.
• An increasing ability by Independents to meet BCO’s demands

1. Growing complexity in Beneficial Cargo Owners Supply Chains: the key drivers:

• An increase in the number of manufacturing and distribution locations :In response to the need to combine off, near and on shore capabilities.
• Demand from consumers for more rapid fulfillment.
• External shocks to the supply chain: BCO’s are building resilience and contingency in to their supply chains in response to what seems to be a growing number of supply chain disruptions whether from “acts of God or Man”
• E-commerce: The revolution in how consumers shop is being adopted by businesses also leading to more pressure on supply chains for greater transparency and flexibility
• From Pallet to Package: Omni Channel has introduced the “package” as a unit of freight
• Logistics is a differentiator: A growing understanding by BCO’s of Logistics as a tool for value creation and competitive advantage.

2. The increasingly commoditized nature of the carriers offering

• Lack of service:
  • Carriers are abandoning direct relationships with BCO’s who don’t command very large volumes of freight.
  • Carrier’s sales and customer service teams have been slashed as the flight to the bottom on rates continues.
  • Super alliances between carriers has further eroded the personal interfaces between the shipping lines and BCO’s.
  • Schedule unreliability
• Lack of capability:
  • Carriers lack the end to-end service supply chain capabilities, focusing instead almost entirely on cost.
• Price volatility

3. An increasing ability by Independents to meet BCO’s demands

• Service
  • Independent forwarders offer personal local service
  • Independent forwarders that are members of global networks offer a world wide solution.
  • Independent forwarders leverage their relationships with carriers to influence reliability of service.
• Price
  • Independent forwarders leverage their relationships with carriers to guarantee the best rates.
  • Independents are increasingly willing to work on an “open book” policy and manage freight flows on a fee rather than margin basis.
• Value Creation
  • Independent forwarders provide integrated solutions across both supply and distribution networks
  • Thinking outside of the box, actively engaging in rethinking and remodeling processes in pursuit of added Value, Visibility and Velocity
  • Moving up the value chain to embrace E Commerce fulfillment capability and 3D Printing