What is international freight forwarding?

Global trade relies heavily on freight forwarding. It enables goods to be transported from A to B quickly, safely and economically. International freight forwarding is growing dynamically because it is still in demand. Let’s take a look at what international freight forwarding is all about.

What is international freight forwarding?

International forwarding is a sector of the transport and logistics industry. It covers a range of services related to the organisation of the movement of goods between countries. It consists of optimising the organisation of transport and other related activities so that the whole process runs smoothly and safely.

International freight forwarding involves more than just transport, it also includes the storage of transferred goods and all formalities related to loading orders, insurance, customs clearance, and inspections. Such services are typically used by merchants operating across borders.

What does international forwarding involve?

International forwarding is an extremely complex process. All the activities it involves must be well scheduled and then closely monitored. The freight forwarding agent must track the entire transport route so as to make sure that goods are delivered safely to the right address at the right time. In addition, all stages must be carried out in compliance with national and international laws and standards.

The cooperation between local and international branch offices and forwarding offices is also crucial, as coordination and constant communication are key. Therefore, modern technologies are increasingly deployed in the industry to track routes (GPS), improve information sharing, as well as to automate many processes. AI is also playing an increasingly important role, as it may help with planning better routes and predicting disruptions.

Polish international forwarding in 2023 – data and forecasts

Despite the global economic crisis, there is still optimism about what the near future holds for the Polish T&L industry. High volumes of online and retail sales justify the expectation that the transport of goods will grow. In terms of logistics and warehousing resources, Poland is perceived as one of the most attractive countries in Europe. Factors perceived as advantages include low operating costs, good location or the availability of large warehousing space.

However, the war in Ukraine, the deepening economic, energy and raw materials crisis, and inflation could lead to a drop in the number of transport orders of up to about 20–25%. Other problems include driver shortages, rising fuel prices, rising taxes, the expansion of toll roads, and higher fees for certain road sections. Smaller local freight forwarders may be more vulnerable to the impact of these developments.

According to the 2023 T&L Ranking, all Polish companies taken together posted revenues of PLN 99.05 billion, which is 21.2% more than the year before. With the overall difficult situation, however, the revenue growth rate was 7.6% lower than in 2021.

On the other hand, 26 companies (five more than last year) had revenues of more than one billion polish zlotys, and their combined revenues amounted to PLN 67.3 billion, an increase of 32.7%. Compared to the previous year, however, the result is also markedly lower, as back then the increase amounted to 42.5%.

According to the report of the Polish Economic Institute, “Branża TSL w obliczu autonomizacji i wojny”, logistics operators make a significant contribution to Poland’s GDP – they contributed 5.7% in 2021. Data shows that our country is becoming an important logistics hub in Europe. In 2021, Polish drivers transported the largest amount of goods on the EU market. Polish enterprises accounted for 19.8% of all the transport work within the EU, overtaking former leaders, Germany and Spain.

Recent years have been considered good times for Polish exports (with an average annual increase in value of 9% between 2005 and 2021), which meant high turnover for T&L companies offering international transport.

Currently, it appears that the best solution would be to adapt to deglobalisation and to the emerging practice of friendshoring. The potential of the Polish T&L industry is gaining international recognition, especially in Europe, and it is worth taking advantage of this trend. The situation offers an opportunity to grow and to mitigate the impact of the current turbulent times.