The living space of small and medium-sized lenders in cross-border logistics is getting smaller and smaller!

2022-06-01 0 By

If small and medium-sized freight forwarders can strengthen their voice through “keeping warm together”, they will have more advantages than going it alone, no matter they form alliances or join associations.More and more evidence proves that the living space of small and medium-sized freight forwarders in the current market is becoming smaller and smaller.Maersk’s new contract products for 2022 have been “poorly reviewed” by small and medium freight forwarders.Maersk, they argue, has given fixed space to large shippers or forwarders who can only accept spot rates that are much higher than long-term contracts, without space security or stability.Indeed, when Maersk released its product list in December 2021, there was collective anxiety among shippers.Although Maersk later said in a statement that “forwarders have been and continue to be important customers for our container shipping business,” they were unable to dispel their concerns.According to its latest list of six products, three of which are provided only by Maersk sales teams, will “guide customers to the best solution for their needs”, with long-term signings focused on the world’s top 200 customers by volume.Therefore, small and medium freight forwarders can only accept spot freight rates and products, and can not carry out a more long-term booking plan.Maersk’s move is not unique. The difficulties faced by smaller freight forwarders go beyond products and services that are closed to them.A number of recent acquisitions in the freight forwarding industry have attracted much attention, including vertical acquisitions by Maersk, Mediterranean Line, CMA and horizontal acquisitions in the freight forwarding industry.The booming market in 2021 brings ample cash flow to the industry.Backed by plenty of cash, targeted acquisitions of its own businesses are almost a sure thing.The acquisition of Maersk, for example, strengthened mainline’s regional presence;Mediterraneans chose emerging markets for their acquisitions;CIMC Logistics’ most recent acquisitions have also targeted Latin America.For small and medium-sized freight forwarders, the growing scale of competitors means that the living space is getting smaller and smaller, and eventually fall into the situation of internal troubles and external aggression.So how do you get out of this mess?For a long time, freight forwarders, especially small and medium-sized freight forwarders, have been positioning themselves as “earning price difference”, resulting in their lack of core competitiveness when the pressure of market competition increases.This is certainly fatal in the current market.Therefore, at present, if small and medium-sized freight forwarders can strengthen their voice through “keeping warm together”, they will have more advantages than going it alone, whether they form alliances or join mass organizations.Of course, if there is enough cash flow, it is also a good way to grow through acquisition or merger.In any case, for today’s small and medium freight forwarders, there are few outlets, and there seem to be few alternative development directions.More important — now may be the last window for a breakthrough.