All backed up: Vertical integration among industry competitors lowers 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 1.3% over the five years through 2017-18, due to strong competition and changes to the industry's structure. The industry's performance is expected to weaken further in 2017-18, with revenue anticipated to fall by 1.5%, to $2.39 more.

Industry Statistics & Market Size
Annual Growth 13-18
Forecast Growth 18-23
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Operators have been forced to absorb purchase cost fluctuations for freight space and fuel
  • Logistics companies have increased the size and scope of their product offerings
  • The ongoing shift towards integrated logistics has restrained revenue growth
  • Industry Report - Industry Key Buyers Chapter

    The Road Freight Forwarding industry is characterised by low market share concentration, with the largest four players accounting for less than 20% of industry revenue. Smaller companies make up the majority of the industry, many of them self-employed operators. Businesses employing fewer than 20 people make up approximately 90% of industry enterprises, according to ABS data. Small-scale operations within freight forwarding are quite feasible. Industry knowledge, industry contacts and the bulk purchase of transport space provide the value-add, and none of these factors require substantial capital investment. Industry fragmentation contributes to fierce competition, which has led to low profitability compared with other sectors, forcing some smaller operators to exit the industry...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
  • 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
  • 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
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
  • When operators condense loads from multiple customers into a single shipment or container.
  • Fuel Surcharge
  • An additional 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 is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    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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