LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global freight brokerage market to grow at a CAGR of more than 4% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global freight brokerage market for 2017-2021. The global freight brokerage market is segmented into LTL, FTL, temperature-controlled, and other types of services that include dry van and flatbed trailers. The LTL freight brokerage accounted for the highest market share among all the types of services.
According to Shakti Jakhar, a lead analyst at Technavio for logistics research, “An increasing number of technology-based providers emerging in the freight brokerage market will have a positive influence on the growth of the global freight brokerage market. For instance, emerging start-ups such as TGMatrix, Freightos, and Transfix, which are offering technology-based freight brokerage services that are reducing the cost of shippers by 10% to 18%.”
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global freight brokerage market:
- Increasing digitization in freight brokerage industry
- Rising industrial demand for freight transportation
- Growing demand for outsourced services
Increasing digitization in freight brokerage industry
Increasing digitization in the industry drives the global freight brokerage market. It is estimated that the app-based freight market will have a compounded growth rate of more than 60% during the forecast period in the US.
In 2015, Cargomatic, a logistics service provider in North America, launched an app for same-day local trucking service. It also estimated that more than 80% of the truck drivers in the US carry smartphones. This will drive the growth of the global freight brokerage market as it will provide an automated on-demand freight brokerage platform for carriers and shippers. This will also help perform every step such as finding the load, negotiating the prices, insurance and track and trace at the lower cost along with high speed and transparency.
Rising industrial demand for freight transportation
The demand for freight transportation is increasing in many industries, which is generating the demand for freight brokers. Freight transportation is a key element in the construction industry as most projects are handled offsite. Moreover, the infrastructure, real estate, and the energy industries require construction equipment.
Furthermore, the e-commerce industry is expanding, which is leading to an increase in freight transportation. In 2015, C.H. Robinson, a global logistics provider and a freight broker, acquired an online trucking marketplace, Freightquote, to tap the e-commerce industry.
“Furthermore, many experienced freight providers are offering industry-specific supply chain management solutions. For instance, Kuehne + Nagel, a global transportation and logistics provider, is offering oil and gas logistics that can handle heavy cargo and special projects. The presence of such industry-specific providers is generating the demand for freight brokers,” says Shakti.
Growing demand for outsourced services
The global freight brokerage market is growing because of an increase in the demand for outsourced services. In 2016, the global outsourced logistics market accounted for more than USD 600 billion with a yearly growth rate of more than 4%. Also, more than 40% shippers outsourced freight brokerage services in 2016 globally. This is primarily because freight brokers offer all logistics solutions, which include online logistics management and regional and global shipments via all the modes of transportation.
Thus, with an increasing demand for outsourced services, the demand for brokerage of freight is increasing as it saves time and money for both shippers as well as carriers. This is further helping the global freight brokerage market to grow.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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