The golden age of high profits in freight forwarding, fueled by pandemic-driven demand, has come to an abrupt end. As the market shifts into a phase of zero-sum competition, industry players are scrambling to adapt through aggressive mergers and acquisitions. What began as a strategy among market leaders has now spread to mid-sized operators, reshaping the competitive landscape.
Survival in a Stagnant Market: M&A Becomes Key Growth Strategy
Facing multiple challenges in international logistics, horizontal acquisitions have emerged as a critical tool for companies seeking rapid expansion and market consolidation. The freight forwarding industry is witnessing an unprecedented wave of mergers, with market leaders taking particularly aggressive positions.
1. Kuehne+Nagel: The Serial Acquirer
The world's top ocean and air freight forwarder has consistently pursued a long-term acquisition strategy. In June 2023, the company announced its purchase of South Africa's Morgan Cargo, a leader in perishables logistics across South Africa, the UK, and Kenya. This follows Kuehne+Nagel's landmark 2021 acquisition of Asia's Apex International, its largest purchase to date.
"Acquiring Morgan Cargo allows us to provide more reliable logistics services," said Yngve Ruud, member of the management board responsible for air logistics. "Expansion in high-growth markets like Africa aligns with our 2026 strategy."
2. Geodis: Six Months of Acquisition Spree
The world's 10th largest ocean freight forwarder has been equally acquisitive in 2023:
- June 2: Acquired Switzerland's ITS to strengthen European operations
- May 23: Purchased US-based Southern Companies for enhanced North American capabilities
- March 13: Bought France's Transports DEVOLUY to consolidate domestic networks
- March 7: Added Germany's Trans-Flex to its portfolio
These moves helped Geodis surpass €13 billion in revenue in 2022, achieving its 2023 target a year early.
3. SGL: Three Acquisitions in One Week
The German logistics provider made headlines in June 2023 by acquiring ETS Transport & Logistics GmbH, strengthening its position in Europe's largest logistics market. This followed a remarkable July 2022 when SGL purchased three forwarders in seven days: Sea-Air Logistics, Netherlands' Gelders Forwarding, and Hungary's Advection Logistics.
4. Milkyway: China's Rising Star
Chinese forwarders are keeping pace with global consolidation. Shanghai-listed Milkyway Chemical Supply Chain Service Co. has executed three major acquisitions:
- June 5: Gained control of Shandong's Care International Logistics
- June 4: Announced full acquisition of Singapore's LHN Logistics
- April: Purchased SDL to expand chemical distribution
Over the past 30 months, Milkyway has completed 13 transactions worth ¥1.43 billion, evolving from a freight forwarder into what it calls a "global super chemical Amazon."
Market Reversal: From Shortages to Glut
The pandemic boom has given way to challenging market conditions. Xeneta's chief airfreight officer Niall van de Wouw observes: "With demand declining, forwarders can't grow through existing clients alone. They're forced to take market share from competitors."
Data reveals stark changes:
- May 2023 air cargo spot rates down 40% year-over-year
- IATA predicts 2023 air cargo revenues may drop 31%
- Ocean freight rates have similarly collapsed as inventory management tightens
Strategic Responses: Innovation Meets Cost Control
Mario Cavalucchi, VP of European operations at AIT Worldwide Logistics, notes the paradox facing forwarders: "While trying to create new business, they're forced to reduce margins to retain clients. Meanwhile, operating costs have risen significantly."
The industry faces fundamental questions about whether to pursue aggressive growth or maintain existing strategies. "Market concerns are intensifying," warns van de Wouw. "Hope for a strong peak season is fading."
Industry Evolution: From Capacity Hoarding to Integrated Services
The business model is shifting from profiting on capacity shortages to earning service fees through sophisticated logistics management. Major forwarders are transforming into integrated third-party logistics providers to maintain stability during downturns.
Market consolidation follows a clear pattern - economic slowdowns become opportunities for industry leaders to accelerate acquisitions. The current wave, now extending to mid-sized operators, suggests the industry is entering a period of accelerated differentiation where scale advantages will become increasingly decisive.