Global Freight Market: Key Trends and 2023 Outlook

The global supply chains are still reeling from the after-effects of the global pandemic-enforced disruptions, and the Suez Canal obstruction, the Russia-Ukraine war, and over-pressed EU-APAC trade have yet again spangled the global freight ecosystem with newer challenges. Despite the market projections hinting toward a significant growth of 7.10% CAGR till 2029, the global freight market is facing multiple challenges. Some of the most consequential ones include the global energy contention, change in customer perspectives towards sustainable brands, and cut-throat competition in cross-border commerce and delivery ecosystems.

Shared below is a quick walkthrough of global freight market trends and updates for a bird’s eye view of how the market is going to evolve in the near future. 

Global Freight Market: 4 Key Trends to Look out for 

#1 – Digitization for Risk Assessment and Avoidance

2022 saw multiple black swan events that reinforced the belief in robust, resilient, and flexible supply chains. As the world witnessed the rise of cross-border eCommerce, the Suez Canal obstruction, port congestions, and EU energy challenges stemming from the Russia-Ukraine war have left a huge and disruptive effect on supply chains. Other challenges, such as staffing shortages, inflation, and demand peaks that left warehouses with overstocked shelves, have all compelled the freight industry stakeholders to rethink their operation and business risk management strategies. 

2023 will be no different as domestic and international freight forwarders will increasingly embrace digitization to ensure resilience and readiness for risk avoidance. McKinsey states that 2023 will see 80% of supply chain leaders continuing investments in digital supply chain management technologies. Data analytics for predictive insights into impending business risks, risk model analysis for identifying the hidden pockets of optimization, and automated alert mechanisms for instantaneous resolution – the focus would be largely on risk assessment and avoidance.

#2 – Sustainability Becomes a Priority

Sustainability will continue to be a central trend in the global freight forwarding industry as the searches for sustainable goods have increased by 71% since 2016. Also, 66% of consumers voted sustainability as one of the top five purchase drivers, 71% of global consumers are buying more sustainable products, and nearly 90% of Gen X customers are willing to spend 10% more on sustainable products.

Freight forwarders form a crucial link in the supply chain in relation to sustainability as they have procurement power. Hence, by making smart decisions, they can support the transition toward sustainability. This again pushes the freight industry towards smarter and more conscious decision-making, which is rooted in digitized logistics and supply chain management.

#3 – Digitally-Powered Freight Forwarders To Gain More Market Share

As customers look for distinguished services, such as real-time shipment tracking, carbon-conscious logistics, razor-fast deliveries, and white-glove delivery services, freight forwarders are looking for ways to make all this happen. Hence, mere software-based operations management no longer works, and freight forwarders with unified operations’ views, integrated offerings, the latest technology-based business functions, etc., are able to deliver across customer expectations.

Seamless collaboration across multiple customers and service providers, daily customer reports, advanced data analytics for business intelligence, reliable shipment documentation, and real-time offerings for tracking and key milestone reporting – these are some technological capabilities that are going to make a difference in terms of market share.

#4 – Economic Instability Paving the Way for Protectionism

Rising inflation and geopolitical instability have forced businesses to nearshore or reshore their manufacturing operations. The International Monetary Fund (IMF) predicts that global economic growth to trickle down from 3.2% in 2022 to 2.7% in 2023, which is supported by the World Trade Organisation’s recent projections. This loss of market momentum will significantly impact the freight industry as Maersk points out the freight rates are coming down faster than expected, and DHL expects the carriers to perform blank sailings to balance of demand/supply situation.

Consequently, more and more countries are implementing and moving toward protectionist strategies, which can greatly impact the freight forwarding industry if their rise continues.

As the global freight market continues to evolve and face disruptions, digital transformation and automation are the major trends that are here to stay for a very long time. AI/ML-powered freight management helps businesses gain multi-modal logistics visibility, automated document & billing management, and improved CX. It can help freight forwarders reduce their freight costs by 10%, reduce order allocation time by 45%, and unlock man-hours savings of 75%.