2023 was a tough year for the global shipping market. The economic slowdown, particularly evident in Europe and the United States, coupled with declining consumer activity, severely impacted the market. By the end of 2023, the global shipping market was valued at EUR 192.73 billion, shrinking by 1.3% at constant prices.
The true extent of last year’s economic slowdown becomes clear when considering volatile prices. In this context, the market plummeted by as much as 45%, primarily due to significant reductions in sea and air transport rates throughout most of 2023.
Among the two segments analyzed, air forwarding performed the worst, with its value decreasing by 2.1% at constant prices, down to EUR 84.56 billion. The sea freight market also contracted in 2023, though less severely, declining by 0.6% to EUR 108.17 billion.
All three leading regional markets—Asia Pacific, North America, and Europe—contracted in 2023 by 1%, 1.8%, and 2.3% respectively. As these regions collectively accounted for 89% of the global market, their decline significantly impacted the overall global shipping industry.
Interestingly, other regional markets saw growth in 2023 compared to the previous year. The Middle East and North Africa (MENA) region performed the best, with a 3.4% increase in market value.
In air freight forwarding, North America was the hardest hit, suffering a 4.2% decline, while Europe led the decline in sea freight, dropping by 2.1%.
Inflation, geopolitics, and fuel prices to blame
Several factors contributed to the decline in both forwarding segments. Weaker revenues from global international trade, high levels of inflation and fuel prices in Western countries, weak economic growth, and even the contraction of key European economies all made 2023 a challenging year for logisticians. Additionally, geopolitical uncertainties, including the ongoing war in Ukraine and the escalating conflict in the Middle East in the last quarter of 2023, led to a significant drop in volumes.
In the air cargo sector, data from the International Air Transport Association (IATA) indicated a nearly 2% decline in transport activity, down to 24 billion tonne-kilometers. This decline also translated into lower revenues, with profits from air freight in 2023 being one-third lower than the record-breaking figures of 2022. However, it is worth noting that these profits were still more than 43% higher than pre-pandemic levels.
Maritime transport in 2023 was marked by a significant drop in rates, following the high levels seen during the pandemic. This was due to both lower demand and an oversupply of containers and transport capacity. The Red Sea crisis, triggered by the Gaza war, caused rates to spike towards the end of the year, but not enough to significantly improve the year’s overall results for logisticians.
The recovery has begun
The positive trend that started in the last quarter of 2023 is expected to continue throughout 2024. Falling inflation, increasing consumer purchasing power, the expansion of international trade, an improving economic situation in the United States, and dynamic growth in emerging markets are all expected to contribute to a recovery in the forwarding market.
The market value is expected to increase by 1.7% in constant prices, reaching EUR 196.1 billion. This growth will be driven primarily by sea freight forwarding, with its global value projected to reach EUR 110.9 billion by the end of the year, a 2.5% increase over 2023. This rise will be fueled by both higher volumes, due to improved economic conditions, and increased maritime rates, driven by higher demand and supply constraints, including the ongoing crisis in the Red Sea.
Air forwarding is also expected to benefit from the improving global economy, though its expansion will be more modest at 0.7%. Experts predict that air freight will see considerable gains from the Red Sea crisis, as some shippers opt for faster air routes over long sea voyages around Africa.
In 2024, all regional markets are expected to return to growth. The Asia-Pacific region can expect a 2.3% expansion, Europe 1.5%, and North America a modest 0.9%.
Strong growth in emerging markets
Analysts from Transport Intelligence anticipate accelerated growth in the forwarding market over the next few years. They forecast an average annual growth rate of approximately 3.3% until 2028. By the end of this period, in 2028, the global market is expected to be worth EUR 226.7 billion.
The air forwarding segment is expected to see particularly strong development, with an average annual growth rate of 3.6%. Sea freight forwarding is projected to grow at a rate of 3% annually.
The Asia-Pacific market is expected to grow at an average annual rate of 3.5% until 2028. Both Europe and North America are projected to grow at slightly below the global average, with rates of 3% and 2.8% respectively. Notably, the MENA region and Sub-Saharan Africa are expected to offer significant growth opportunities, with average annual growth rates of 5.2% and 5.9% respectively until 2028.
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