Pay it forward: Strong competition from integrated logistics firms has limited demand

Freight forwarders purchase space on freight transport services in bulk, which they resell in smaller quantities to clients. The Road Freight Forwarding industry's major value-add is the consolidation of loads from multiple clients to use transport space efficiently. Through this service, clients gain access to cheaper freight rates than they could obtain individually, while industry operators receive a small commission. Industry revenue is expected to contract at an annualised 0.4% over the five years through 2018-19, due to strong competition and changes to the industry's structure. The industry's performance is expected to improve in 2018-19, with revenue anticipated to grow by 0.2%, to $2.4 billion...read more.

Industry Statistics & Market Size
Revenue
$2bn
Annual Growth 14-19
-0.4%
Forecast Growth 19-24
Profit
Employment
7,478
Businesses
483
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Road freight forwarders have faced strong external competition from integrated logistics companies
  • Logistics companies have increased the size and scope of their product offerings
  • The ongoing shift towards integrated logistics is expected to constrain revenue growth
  • Industry Report - Industry Investment Chapter

    The Road Freight Forwarding industry is characterised by a low level of capital intensity. For every dollar spent on wages, industry firms invest an estimated $0.06 in capital equipment. Industry operators specialise in arranging the transportation of goods by road, with the majority of transport activity conducted by third-party contractors. As industry firms typically do not own large fleets of transport vehicles or distribution centres themselves, depreciation costs are fairly low.The industry relies primarily on labour to derive revenue, with a strong need for expertise and contacts to manage forwarding operations. While labour costs are significant, they are dwarfed by purchase costs, which are the industry’s largest expense. Cap...purchase to read more.

    Additional Insights for the Road Freight Forwarding Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Road Freight Forwarding Industry are

  • Market research and understanding
  • Optimum capacity utilisation
  • Experienced work force
  • IBISWorld analysts also discuss how external factors such as Road freight service price and Total merchandise imports and exports in the Road Freight Forwarding industry impact industry performance..

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    What's in this report

    What is the Road Freight Forwarding Industry?

    Road freight forwarders primarily organise transport services and consolidate goods for transport. Consolidating loads allows road freight forwarders to achieve and pass on rates that their customers would be unable to achieve alone. Road freight forwarders do not provide underlying transport services.

    Industry Products
  • General freight services
  • Express freight forwarding services
  • Warehousing and distribution services
  • Industry Activities
  • Freight forwarding by road for express deliveries
  • Freight forwarding by road for general freight
  • Warehousing and distribution services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Road freight service price
  • Total merchandise imports and exports
  • Demand from manufacturing
  • Domestic freight task
  • Demand from wholesale trade

  • Current Performance
  • Trading landscape
  • Profitability
  • Diversification
  • Chart: Revenue Growth

  • Industry Outlook
  • Internal dynamics
  • Profitability
  • Infrastructure
  • Table: Road Freight Forwarding Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Road Freight Forwarding Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Manufacturing
  • Wholesale Trade
  • Consumer Goods Retailing
  • Agribusiness

  • Key Selling Industries
  • General Warehousing and Cold Storage
  • Petroleum Product Wholesaling
  • Road Freight Transport

  • Products & Services
  • Express freight forwarding services
  • General freight services
  • Warehousing and distribution services
  • Chart: Road Freight Forwarding Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Manufacturers
  • Wholesalers and retailers
  • Importers and exporters
  • Agricultural and mining operators
  • Chart: Major Market Segmentation for the Road Freight Forwarding Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Rent
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Road Freight Forwarding

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Road Freight Forwarding Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Road Freight Forwarding Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Road Freight Forwarding Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Consolidation
  • When operators condense loads from multiple customers into a single shipment or container.
  • Fuel Surcharge
  • A charge introduced by transport operators to cover increased fuel costs. It is charged in addition to the freight rate.
  • Radiofrequency Identification (Rfid)
  • A wireless tracking system used to monitor goods throughout transportation.
  • Tonne-Kilometre
  • The amount of freight hauled multiplied by the distance travelled.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Road Freight Forwarding market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Road Freight Forwarding:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Road Freight Forwarding market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Road Freight Forwarding, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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