Freight forwarding and Logistics are vital components of the global transportation network, facilitating the movement of over $28 trillion worth of goods annually, which accounts for approximately 11% of the world’s GDP (World Bank, 2022). These sectors enable businesses to operate efficiently across borders, supporting the expansion of international trade and economic growth.
Freight Forwarding manages the practical aspects of moving goods, including coordinating carriers, managing documentation and navigating customs procedures. Globally, the freight forwarding industry is estimated to be worth over $180 billion in revenue (Statista, 2023), with more than 150,000 companies operating across the world, reflecting its critical role in supply chain management.
Logistics encompasses the comprehensive planning, implementation and control of the flow and storage of goods, services and information from origin to consumption. The global logistics market is projected to reach $12.3 trillion by 2027, growing at a compound annual growth rate (CAGR) of 6.4% from 2020 to 2027 (Fortune Business Insights, 2023). This growth underscores the increasing importance of efficient logistics in supporting global trade.
Efficient Logistics and Freight Forwarding significantly reduce business costs.
According to the World Bank’s Logistics Performance Index (LPI) 2023, high-performing countries like Singapore (ranked 1st) and Germany (ranked 3rd) enjoy logistics scores above 4.00 out of 5, translating into faster delivery times, lower costs and increased competitiveness.
Freight forwarders act as intermediaries, simplifying complex shipping processes by coordinating carriers such as trucks, ships, airplanes and trains. They contract with transportation providers to move cargo efficiently, ensuring timely delivery and compliance with international regulations.
For example, the global shipping industry handles approximately 11 billion tons of cargo annually, with containerized freight accounting for over 750 million TEUs (Twenty-Foot Equivalent Units) shipped worldwide in 2022 (UNCTAD, 2023).
Handling international shipments requires navigating complex customs laws, which vary significantly across countries.
Hence, the World Customs Organization (WCO), disclosed that customs procedures can account for up to 20% of total shipment delays, emphasizing the importance of expertise in compliance and documentation. Freight forwarders are essential in ensuring adherence to these regulations, preventing costly delays and penalties.
The role of freight forwarders extends to providing critical services such as preparing customs documentation, ensuring compliance and managing taxes and duties. Their expertise in international regulations helps companies avoid legal pitfalls, save time, and reduce costs.
A study by the International Federation of Freight Forwarders Associations (FIATA) highlights that companies utilizing professional freight forwarding services can reduce shipment costs by up to 15-20% and decrease transit times by 10-30%.
The global trade landscape relies heavily on the seamless coordination between freight forwarders and carriers, which include major players like Maersk, MSC and CMA CGM. These carriers transported approximately 700 million TEUs in 2022, facilitating a significant share of international trade (Alphaliner, 2023).
Indeed, Freight Forwarding and Logistics are indispensable for global trade, supporting economic development, fostering international cooperation and enabling businesses to reach new markets efficiently.
As the world economy continues to grow—projected to expand at an annual rate of 3.5% through 2025 (IMF, 2023)—the importance of efficient Logistics and Freight Forwarding will only increase.
As noted by industry expert, Engr. Ernest Eleodinmuo: “Freight forwarders and customs brokers are crucial in navigating complex customs laws, ensuring compliance and guaranteeing that cargo reaches its destination efficiently. Their role as mediators accelerates supply chains and reduces costs, making international trade more dependable and accessible.”
In essence, leveraging professional Freight Forwarding services not only streamlines operations, but also significantly contributes to a company’s growth, saving both time and money while enhancing global trade efficiency.
Engr. Ernest Eleodinmuo. B. Eng, MNSE, ChMC, MCIoTA, MCILT, FCILSM.
Writes from Lagos, Nigeria.
