The Power 25: How the world’s top forwarders are facing the future

(Charles Kauffman and Lewis King also contributed to this article.)

If 2015 was called the “year of the merger,” with the wave of consolidations across the airfreight industry, 2016 could be the year of deja vu. We have seen these companies before – well, almost all.

While there has been some churn in this year’s “Power 25” list, compared to last year, there is only one new name – Apex Logistics, debuting at No. 21 (see sidebar) – and only one forwarder name technically off the list, but still present, as UTi Worldwide was purchased by DSV in January 2016 and has now been subsumed by the Danish forwarding giant.

But familiarity does not mean complacency. For most of the forwarding giants on this list, innovation in products and services has been of paramount concern in order to maintain their market share. While many ranks look similar to last year’s list, a closer look at the numbers over time, as presented in our chart (see full Power 25 List), reveals some potentially disturbing patterns.

For example, DHL Supply Chain & Global Forwarding, the undisputed champion for many years running at No. 1, dominated the field with more than 2.08 million tonnes of airfreight handled and US$26.1 billion on 2016 gross revenues. However, when you look at the progression of annual tonnages over the last five years, DHL has seen a steady decline in tonnage from 2012 until 2016, with only a slight increase between 2013 and 2014. This should raise some alarm bells in Frankfurt.

Dr. Frank Appel, CEO of Deutsche Post-DHL, apparently heard those bells, saying that DHL Global Forwarding has focused on three types of innovation to help set their service apart from the competition last year.

“2016 was a milestone of DHL Global Forwarding’s Temperature Management Solutions digital transformation,” he said. Using DHL’s LifeTrack cloud platform, the service connects networked devices and other relevant large data sources, and employs data analytics to provide customers who ship temperature-sensitive shipments with “far more transparency and intelligent risk mitigation.” Secondly, DHL rolled out its Electronic Data Management system that enables paperless transportation and faster processing of shipments. Also, the German forwarder rolled out its new scanning application, based on smartphone technology, to update customers about important shipment milestones nearly in real time.

Appel showed that even the perennial No. 1 forwarder on the planet cannot rest on his laurels, ignore innovation and expect to keep its lofty perch.

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