International Trade

Forwarders Face Fight For Survival

March 2007
Phil Hastings, International Trade Today

UK exporters and importers can expect to see further significant consolidation across the country’s freight forwarding sector, with that industry’s top performers get progressively stronger while many others find it increasingly hard to survive.

Latest confirmation of that predictable trend comes from new research undertaken by UK-based business performance analyst Plimsoll Publishing. Less predictably, the study found that, in fact, a ‘staggering’ 97 per cent of the UK forwarding industry’s sales growth in 2006 was generated by just 93 companies. Meanwhile, many other forwarders were struggling to survive ‘in an atmosphere of declining sales and increasing debt, with at least 78 staring failure in the face’.

Those figures – based on research that included an individual analysis of 1,000 freight forwarding companies – prompted David Pattison, Plimsoll’s senior research analyst, to comment that ‘even I would admit to being surprised by the discoveries that my team has made’.

He suggested the latest analysis confirmed that constant rounds of consolidation were creating ‘super companies’, which were exerting an increasing control over the UK forwarding market. ‘Most of the companies in question are large, with sales over £10m. But 12 have sales of less than that – an indication that it is not simply a case of smaller firms being squeezed out,’ he stated.

Expanding further on Plimsoll’s findings, Pattison said that while looked at separately, the performance of the 93 ‘super companies’ could be seen as great news for the UK forwarding industry, the reality was much more disturbing. ‘These companies are forcing such intense competition that others are battling for survival,’ he warned.

‘Unless some of the worst performing companies start to come to terms with the financial implications of flat or declining sales, they will... continued on page two >

 

 

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