The decline in the market value in Europe was more pronounced than in other regions. This is primarily due to the more severe economic slowdown felt in Europe. Globally, shipping volumes decreased by 1.3% in 2023, yet the European forwarding market still represents nearly 30% of the global market.
Both segments of the forwarding market—air and sea—saw declines. Air forwarding shrank by 2.7% compared to the previous year, while sea forwarding contracted by 2.1%.
The health of the European forwarding market is closely tied to the situation in Germany, the continent’s largest economy. For several quarters now, Germany has been referred to as the “sick man of Europe.”
Germany has been severely affected by the economic downturn. Since the outbreak of the war in Ukraine, Germany’s industry, which traditionally relied on cheap Russian gas, has been hit hard. The loss of access to Russian energy resources has significantly impacted the German manufacturing sector. High production costs, compounded by low demand, have resulted in the second consecutive annual decline in German industrial production in 2023, marking the fourth decline in the past five years.
Trade has also suffered. German exports fell by 1.8% year-on-year, while imports dropped by a substantial 9.7% compared to 2022.
Germany’s logistics hub, the Port of Hamburg—the third largest port in Europe—saw a 7% decline in throughput in 2023.
These factors have inevitably impacted the TSL (Transport, Shipping, and Logistics) market. The German forwarding market contracted by 5.2% in 2023, with air freight forwarding experiencing a significant 7.3% decline compared to 2024. Sea forwarding fared slightly better, with a 4.2% decrease.
Other economies also struggling
France, the second-largest economy in the European Union, also witnessed a downturn in its forwarding market, which shrank by 1.4% in 2023. Similar to Germany, the aviation sector was hit harder (down by 3.2%) than the maritime sector (down by 0.6%).
Italy’s market experienced a more significant contraction, decreasing by 2.9% year-on-year. The air freight segment performed particularly poorly, with a 6.8% decline, while the maritime segment decreased by 1.5%.
The UK forwarding market fell by 4% in 2023. The aviation segment saw only a slight decline of 1% year-on-year. However, due to issues in the Red Sea, sea freight in the UK experienced a significant drop of 8.2%. Experts suggest that the air route has become more favorable than the sea route since the Red Sea crisis, a trend not observed in other markets.
Among the larger European economies, Spain stood out, with its forwarding sector expanding by 1.7% in 2023. Air forwarding, in particular, saw robust growth, with Spanish airports recording nearly an 8% increase in transshipped goods.
Denmark, on the other hand, saw impressive growth in its forwarding market, with a 5.9% increase in 2023. The growth was evident in both the maritime (6.7%) and air (4.3%) sectors.
A small piece of the pie
By the end of 2023, Germany accounted for 20.5% of the European forwarding market. France held a 10% share, while Italy ranked third with an 8.8% share. Poland’s forwarding market, the 10th largest in Europe by value, accounted for 3% of the market.
This is in stark contrast to Poland’s position in the road transport market, where it is a dominant European power. In the forwarding market, not only are the largest European economies larger than Poland’s, but so are smaller countries such as Denmark, Sweden, Belgium, and the Netherlands.
Better times ahead
Experts from TI expect that 2024 will bring better times for Europe’s forwarding sector. Rising wages are anticipated to boost consumption, which will be the primary driver of economic recovery. The forwarding market in Europe is estimated to grow by approximately 1.5% in 2024.
Looking further ahead, pan-European growth is expected to accelerate significantly after 2024, with an average annual growth rate of 3% forecast for the period from 2023 to 2028.
Germany’s forecasts are particularly important, as the overall European economy and forwarding market will largely depend on its recovery. The outlook here is cautiously optimistic. Air market growth is projected at 0.4% in 2024, with an average annual growth rate of 3.8% until 2028. For sea freight, the growth rates are estimated at 1.6% in 2024 and 2.9% per year on average until 2028.
Poland’s momentary leap
However, the fastest growth in the forwarding market in 2024 will come from other markets. Poland is expected to be among the leaders. The market will grow the fastest in Ukraine (14.2%), followed by Turkey (7.7%), Denmark, and Serbia (around 6% each). Poland is projected to be in fifth place with approximately 5.9% growth.
On the other hand, in the years leading up to 2028, the market in Poland is expected to slow slightly compared to 2024. The estimated growth for the period from 2023 to 2028 will be slightly below 2%.
Photo: Artur Andrzej, CC BY-SA 3.0, via Wikimedia Commons