LONDON--(EON: Enhanced Online News)--According to the latest procurement intelligence report from Technavio, the global freight forwarding services market is expected to grow at a CAGR of 4.8% over the next five years due to the need for expertise and assistance to facilitate import and export logistics.
“The swiftly growing e-commerce industry is one of the leading factors affecting the growth of the freight forwarding services market”
The research report titled ‘Global Freight Forwarding Services: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices, and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The swiftly growing e-commerce industry is one of the leading factors affecting the growth of the freight forwarding services market,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “Also, the adoption of technologies is leading to an enhanced and optimized supply chain, along with digitization of services, which is attracting more buyers to the market space,” adds Angad.
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Cost saving opportunities in the global freight forwarding services market
The adoption of various cost-optimization levers helps buyers of the global freight forwarding services market realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global freight forwarding services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Freight forwarding service providers adopt technologies such as data analytics, e-freight, web portals, and cloud-based systems to provide a high quality of services to their customers. The adoption of these technologies can result in potential savings of up to 12%.
The adoption of technologies leads to high operational efficiency, timely delivery of shipments, real-time tracking and related communication with the consumer, and efficient time management during the contract period.
Optimization of procurement practices saving aspects
Freight forwarding service providers follow a centralized procurement model and a hybrid sourcing model. They offer term-based contracts which can be periodically renewed, with service-based pricing.
A key factor that buyers consider while choosing suppliers is the said supplier’s relationship with freight forwarders. Suppliers who interact with multiple forwarders close deals more often, leading to higher incomes.
Bundling of services saving aspects
Service providers bundle services such as customs brokerage and logistics consulting to provide buyers a value-added service offering. Such bundled offerings are often very attractive to the buyers and can result in savings up to 10% to the suppliers.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, resellers, and end-users.
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