The Power 25: Top forwarders triumph in a year of adversity

The once-predictable path for freight forwarders is deviating from historical trends for the second year in a row. Ongoing capacity constraints, ocean shipping issues, COVID-19 lockdowns in China, severe cargo congestion at airports and elevated rates are just a few challenges plaguing 3PLs since 2021. Still, most of the world’s top forwarders grew in revenue and transported tonnage in 2021, despite the year’s obstacles. Although revenues were boosted by rising rates due to strained capacity challenges, forwarders had to be innovative to rise to the top. Indeed, forwarders reevaluated offerings, consolidated and grew their businesses through strategic acquisitions and global expansions, while also strengthening e-commerce services and infrastructure as demand boomed globally. They also continued to utilize charter capacity, whether through carrier partnerships or own-controlled networks, to provide much-needed additional capacity. This year’s Power 25 ranking reflects a year of strategy and problem-solving with two new entrants to the list, significant jumps in ranking by China-based forwarders and a newly crowned king of airfreight forwarding: Kuehne+Nagel. Considering the adage that challenges can make you stronger, these 3PLs continue to reap the benefits of their flexibility and foresight, yet again triumphing in the face of global adversity. The tonnage and revenue figures used in the Power 25 ranking are based on a combination of data from Armstrong & Associations and Air Cargo World research. View full Power 25 ranking here. Kuehne+Nagel claims the crown Swiss forwarder Kuehne+Nagel claimed the No. 1 spot atop the Power 25 ranking with 2021 airfreight tonnage of 2.22 million tonnes, overtaking DHL Supply Chain & Global Forwarding (DGF), which had held the top position since at least 2012. Kuehne+Nagel reported a significant year-over-year increase of 54.9% in its airfreight tonnage and a 58.4% YoY increase in overall logistics revenue to $40.8 billion. Kuehne+Nagel’s February 2021 acquisition of Apex Logistics , ranked No. 7 in last year’s Power 25 ranking , helped boost its overall airfreight volumes. In fact, the consolidation of Apex Logistics accounted for roughly half of the forwarder’s airfreight growth for the first time in May 2021, Yngve Ruud, executive vice president of air logistics at Kuehne+Nagel, told Air Cargo World . “With Apex, we have gained prime access to air cargo capacity and capacity management and a robust co-loading concept,” Ruud said. “Additionally, we have strengthened our high-tech, e-commerce and e-mobility service portfolio.” The forwarder’s charter program also helped boost available airfreight capacity, he noted. “We have significantly increased charter flights in 2021 to support our customers, and expect charter flights to remain the backbone of our airfreight capacity,” Ruud said. “We operated around 3,300 charter flights last year, [and] our own charter capacity will continue to be an important asset also in 2022, where we will look for more own-controlled capacity .” The Swiss forwarder’s growth streak has continued into 2022, with gross-profit airfreight revenues for Q1 up 103% YoY to $850 million and roughly 574,000 tonnes of cargo, up 33% YoY. Rounding out the top 3 Meanwhile, coming in at No. 2 is DGF, which transported around 2.09 million tonnes of airfreight in 2021, up 25.7% YoY, and reported a 32.5% YoY increase in logistics revenue to $37.7 billion. Throughout the pandemic, larger freight forwarders including DGF have leveraged charter networks to combat capacity challenges. The forwarder expanded its dedicated flight operations to supplement the lack of commercial capacity on in-demand trade lanes such as Vietnam to the U.S. and Europe, Andreas Von Pohl, senior vice president of air freight at DGF Americas, previously told Air Cargo World . Meanwhile, Danish forwarder DSV maintained its No. 3 spot, handling roughly 1.5 million tonnes of cargo in 2021, up 18.74% YoY. Revenue in 2021 was also up, with DSV reporting a 58.6% YoY increase to $29 billion. Not only did DSV’s 2021 acquisition of Agility’s Global Integrated Logistics (GIL) unit have a positive impact on airfreight earnings, especially in Q1 2022, but the unit is expected to continue adding an additional $4 billion to DSV’s total profits once the integration is complete later this year, CEO Jens Bjorn Anderson said during the company’s April earnings call . DSV has also worked to bolster its regular charter network, and in October 2021 increased weekly capacity from Miami (MIA) to Brazil (VCP) , adding roughly 100 tonnes of capacity per flight. The route aims to enhance DSV’s “Brazilian Wings” charter product that operates four times per week from MIA to VCP. DSV also established its own-controlled charter network, Globetrotter , in September 2021 to connect Europe, Asia and North and South America and avoid congestion and slowdowns at major airports. Airports in the Globetrotter network include Liege (LGG), Istanbul (IST), Shanghai (PVG) and Chicago (RFD), among others. Moving up in rank China-based forwarder AWOT Global Logistics saw the largest jump in rankings, shifting to No. 13 from No. 22 in the Power 25 list, and reporting a 94.5% YoY increase in tonnage to 486,216 tonnes of airfreight. Like many forwarders, AWOT utilized the power of charter space to boost volumes amid the capacity crunch. “AWOT airfreight tonnages grew robustly amid the contraction of airspace capacity in 2021, which was attributed to the timely and decisive use of freighters and passenger flights chartering,” Kenny Li, AWOT general manager, told Air Cargo World . “There was a 60% increase in 2021, during which we chartered more than 1,600 flights when compared to around 1,000 charters in 2020.” Li further noted that medical supplies and e-commerce transport boosted export tonnage in 2021. “One of our strategies to keep up with the business growth is, in addition to our existing worldwide networks, to extend and also intensify our global outreach,” he said. AWOT plans to do this via acquisitions, and by increasing its footprint with offices in Europe, including in Amsterdam (AMS), Luxembourg (LUX), Frankfurt (FRA) and London (LHR) in 2022-2023. The forwarder also has its sights set on “North America trade lanes in 2023-2024,” Li said. Sinotrans, another China-based forwarder, also moved up the list considerably, ascending to No. 8 from No. 12. In 2021, Sinotrans handled 804,000 tonnes of airfreight, up 51.04% YoY, and reported a gross logistics revenue of roughly $1.9 billion. The Chinese forwarder is one of the many forwarding partners of Cainiao, the logistics arm of e-commerce giant Alibaba. Cainiao has been expanding its logistics footprint significantly in recent years, opening various parcel sorting centers in Spain, France, Germany, Italy , and most recently at Liege Airport (LGG) in 2021. In June 2020, Sinotrans partnered with Cainiao and Atlas Air to launch charters between Hong Kong (HKG), Brazil (GRU) and Chile (SCL) to support cross-border trade. More recently in July 2021, Sinotrans partnered with Air France-KLM Cargo to offer a “green route” between Hangzhou (HGH) and Amsterdam (AMS) using sustainable aviation fuel (SAF). Also making a significant jump in rank was U.S. forwarder C.H. Robinson, which climbed five spots to No. 20. C.H. Robinson leveraged its infrastructure in various regions, including Asia-Pacific and Europe, to provide better flexibility and solutions as supply chain challenges persisted. New entrants Two forwarders made their debut on the Power 25 2021 ranking: Taiwan-based Dimerco Express Group entered the list at No. 24 and Austria-headquartered cargo-partner came in at No. 25. Dimerco was initially listed as one of Air Cargo World ’s 3 Forwarders to Watch in 2021 after robust tonnage growth and a restructure in 2019. The forwarder handled roughly 252,000 tonnes of cargo in 2021, up 26% YoY, and saw a gross revenue of just over $2 million. In 2021, the forwarder saw drastic increases across many verticals, including a 95% jump in auto components, 68% increase in apparel and textile shipments and 235% spike in solar energy-related cargo, a Dimerco spokesperson told Air Cargo World . With mainland China to the U.S. East Coast a hot trade lane, Dimerco bolstered efforts to increase capacity to meet market demand, the spokesperson added. In fact, air exports on the China-U.S. trade lane increased 52% YoY, while air imports skyrocketed 101% YoY. With demand still growing, the forwarder in March launched a multimodal solution for electronic, automotive and aerospace shipments being transported from China to Mexico via Los Angeles (LAX) and Dallas (DFW). The forwarder has also been expanding its e-commerce business and in Q1 2021 launched operations at e-Commerce Bonded Logistics Center (BLC) in Indonesia. The BLC includes a more than 10,000-square-foot warehouse with a potential throughput of more than 150,000 units per day. Coming in at No. 25, Vienna-based cargo-partner handled roughly 239,400 tonnes of airfreight in 2021, up 32.26% YoY, primarily driven by automotive, pharmaceutical and high-tech shipments, Air Cargo Corporate Director Product Manager Jo Feiks told Air Cargo World . Feiks further noted that the company’s growth can also be attributed to the ongoing capacity shortage driven by maritime congestion and the company’s charter program, which operates weekly flights between major airports in Asia, Europe and the U.S. “The growth from 2020 to 2021 can largely be attributed to the ongoing capacity shortage in the seafreight market, which goes hand in hand with increased transport costs and has resulted in many seafreight shipments being switched to airfreight,” Feiks said. “Besides the scheduled weekly charter flights, we operate 24/7 EMERGENCY Desks in China, India and many European countries for highly time-critical transports. In the last two weeks, we had a dozen deliveries by helicopter.” Cargo-partner also made major investments in its e-commerce infrastructure in 2021 as well as warehouse expansions. In fact, growing e-commerce demand encouraged cargo-partner to recently invest into expanding its iLogistics Center near Ljubljana Airport (LJU) in Slovenia, complete with a drone runway project that the company aims to roll out at other global warehouses. “E-commerce will continue to grow, and demand for time-critical transports will remain high,” Feiks said. “We continue to invest in expanding our network and have increased our global warehouse space from 260,000 square meters to more than 280,000 square meters in the past year, with new warehouse capacities in Germany, Croatia, Slovenia, China and Thailand, among other countries.” Acquisitions, expansions and e-commerce shape 2022 outlook The busy M&A landscape of 2021 has continued to play out this year and looking ahead, both acquisitions and expansion seem to be on forwarders’ minds as they provide ways to tap into new markets and offer more consolidated services for customers. For instance, Power 25 newcomer Dimerco expanded its U.S. network to Arizona following the completion of its investment in Phoenix-based BC Logistics while also extending operations in Savannah, Ga. The move aimed to strengthen the forwarder’s footprint in the U.S., and increase its services in domestic transport for industries requiring time-critical service, including semiconductor, automotive, aerospace, power and energy, and health care shipments, Dimerco said. Fellow new entrant cargo-partner also made significant expansion efforts in 2021, opening new offices in Greece, North Macedonia and the U.K., Feiks said. “In the U.K., we completed the full acquisition of Aztek International Freight at the start of 2022. In the Netherlands, we acquired our local partner Transcargo, which was a further important step toward strengthening our presence in Western Europe,” he said. “We are [also] enhancing our e-commerce capabilities in Germany, Hungary and Slovenia. We’ve expanded our gateway at Budapest Airport (BUD) and now have our own screening equipment to speed up airfreight shipments.” Feiks further noted that cargo-partner has also expanded its warehouse capacities in Northeast Europe with new investments in Poland, Slovakia and the Czech Republic. The lockdowns in China over the past 24 months — namely in Shanghai and Hong Kong — paired with the loss of capacity as a result of sanctions on Russia, are spurring forwarders to anticipate where cargo or manufacturing production will migrate in order to combat supply chain challenges. Understanding these trends will help forwarders maintain their growth streaks. “We can see that the trend towards near-shoring is going slower than expected. Companies are trying to be more independent from China and are shifting to India, Thailand, Cambodia or Turkey for the European market,” Feiks said. “Northern Africa will also play a more important role in the future. In addition, the EU is making efforts to revamp its semiconductor industry in Western, Central and Eastern Europe.” Full power 25 list 3 forwarders to watch in 2022

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