News > The dilemma faced by international freight forwarders is the end of an era!
In 2019, the competition among the giants of the international freight forwarding industry is intensifying, and new scientific and technological enterprises are springing up. The international freight forwarding industry is about to usher in an unprecedented change.
On April 1, DSV announced the acquisition of Panalpina with us $4.65 billion. After the merger, the new company was renamed DSV Panalpina A / s, and its business scale entered the top three in the world.
On February 22, flexport, a technology-based freight forwarding company in Silicon Valley, received a new round of investment of US $1 billion, led by Softbank vision fund and followed by SF, founders fund and other companies. The company's valuation reached US $3.2 billion.
On March 20, Uber officially announced that its freight business had officially expanded to Europe and would open Uber freight office in the Netherlands. At the same time, it planned to cooperate with giants such as DSV and Kuehne + Nagel.
There are more and more mergers and acquisitions among freight giants, the improvement of industry efficiency by the Internet and new technologies is becoming more and more prominent, and the development of e-commerce is reconstructing the organizational form of the whole traditional freight chain.
1. What is the industry value of international freight forwarding?
Some time ago, I chatted with a friend who has been engaged in the international freight forwarding industry for most of his life. He said that he has been doing this business for nearly 20 years. In order to engage in business and attract customers, I feel that he has participated in many wine and dinner parties, which has made some contributions to stimulating domestic demand and stimulating consumption. Where is the industry value of freight forwarding?
Every day's work is to turn around the butt of airlines and shipping companies. Positions and freight rates are always the core of everyone's attention and competition. It's about the relationship with upstream capacity providers. After getting the core resources, hire a large group of sales to sell. I feel like I'm either socializing or on my way to socializing every day.
The larger the volume of freight forwarders, the more people the company keeps. The salaries of operation, document, customer service, finance and other service posts are getting higher and higher, and the typical labor-intensive industries are highly dependent on labor.
The profit of freight forwarding industry mainly comes from freight difference, service fee and operation link.
As the industry becomes more and more Internet-based and the information becomes more and more transparent, there is little freight difference left. One ticket of air cargo is usually sold directly at the cost price plus thirty-five cents.
The service fee mainly comes from the provision of customs declaration, inspection, space booking, documents, trailers and other links. With the merger of customs and commodity inspection and the electronic and online customs declaration, the profits of many customs brokers have decreased significantly and are on the verge of survival.
The operation link mainly depends on the volume weight ratio of goods and the cost optimized profit brought by scale effect. At present, the core profit of a large number of international freight forwarders actually comes from the operation link.
The core of the existence of international freight forwarders is due to the opacity of frequent changes in freight rates, large warehouse variables and difficult to guarantee, lengthy and complex links in the transportation chain, incomplete visualization of cargo transportation trajectories, ineffective connection of upstream and downstream data of the industry, manual reconciliation of offline transactions and storage in the accounting period.
2. What is the core competitiveness of international freight forwarders?
At present, the vast majority of international freight forwarding companies in the market still provide the role of air and sea freight agency booking, that is to say, they provide a trunk transportation agency service.
In the whole international logistics and transportation link, the trunk transportation cost is often the highest in the whole transportation link. It is also a link with high cost transparency, easy standardization of operation and relatively low competition threshold.
Enterprises engaged in trunk transportation agency, whether air transportation agency or sea transportation agency, currently have a deep sense of crisis. The essence of agency is relationship business + strong customer acquisition ability.
From the perspective of the relationship with upstream capacity providers (shipping companies and airlines), in fact, we will find that the whole upstream capacity providers are undergoing profound changes in terms of information level and operation efficiency, the expected benefits brought by relationship business are decreasing, but the cost of maintaining the relationship is increasing.
From the perspective of strong customers, we can see that the traditional freight forwarding enterprises on the market are mainly sales oriented enterprises. Only by bringing customers over, pulling goods over and doing quantity is the last word. With the volume of goods, we can better maintain the cooperative relationship with upstream capacity providers.
At present, all air and sea freight agents will find that they are facing fewer and fewer direct factory customers, more and more peer special line customers, larger and larger volume of single customers, and stronger bargaining power of customers. E-commerce platforms and big sellers are trying to optimize trunk transportation costs, and the living space of agents is being squeezed.
Many large e-commerce sellers have a large volume of goods. In order to further optimize the logistics cost, they split each link from export customs clearance, China Hong Kong transportation, air trunk line and tail service. Each link finds a service provider to cooperate, which is equivalent to setting up a special line. In essence, e-commerce sellers have also become a logistics company.
The settlement cycle of e-commerce sellers and air and sea freight agents is at least monthly. Many money will arrive two or three months later. The settlement cycle of air and sea freight agents and airlines and shipping companies is weekly or semi monthly. Even if monthly settlement can be obtained, the premise is to pay a large amount of deposit (deposit) in advance.
At present, some special line enterprises, e-commerce platforms and core sales still choose to continue to connect airlines and shipping companies through air and sea transportation agents, which not only considers the outsourcing of trunk transportation, but also weighs the efficiency of capital use. The settlement cycle of air and sea freight agents and customers is much larger than that of upstream capacity providers. To some extent, air and sea freight agents act as a tool for customers to advance money.
3. Great changes in the industry stem from the end of an era
China's international freight forwarding industry started with a number of global companies entering China in the early 1990s, and then experienced more than 20 years of rapid development, resulting in a large number of private freight forwarding enterprises. Most of the business owners of many private freight forwarding head enterprises come from freight companies subordinate to Sinotrans, the four major express companies, airports or airlines. They all have a special brand of the times and institutional dividends at a specific stage of development of the industry.
The upsurge of foreign-funded enterprises to invest and set up factories in China triggered by China's reform and opening up, as well as the cost transfer of phased division of labor in the manufacturing industry all over the world, give China the opportunity to become a world factory. The reason why Hong Kong airport has been able to rank first in the world's air cargo throughput for many consecutive years stems from the location advantage of relying on the world factories in the Pearl River Delta.
A big factor in the huge growth of export volume in the past decade is that China has caught the fast lane of WTO and become the world's largest export country in one fell swoop. The huge incremental market of export goods supports a large number of salesmen who resign from large freight forwarding companies and work alone. They can choose to be their own boss at a very low entrepreneurial cost. With a telephone and a computer at home, the soil for light asset microenterprise entrepreneurship still exists.
At least before 2010, the whole international freight forwarding industry was still in the market of picking up money. The market supply relationship was that the factory was ready to find the warehouse, find the channel and find the logistics company to deliver the goods. At that time, as long as the price was not too outrageous, it was OK to send the goods. Anyway, the customer's profit was relatively high, which was enough to support the profit space for several freight forwarding companies to resell each other. In other words, being a second-class dealer could be very moist at that time.
It was a best time and a worst time!
The best era comes from the fact that most people can basically earn money as long as they dare to do it. The worst times come from the fact that everyone's money comes too easily. I think it's not difficult for the industry to make money continuously. It's easy to make some risky and radical investments with the money, while ignoring the deeper problems of their own enterprise development.
Most enterprises earn the dividends of the times in large industries and local opportunities within a specific range of specific conditions.
Today, with the gradual reduction of dividends after China's reform and opening up has entered the deep-water period, China needs to undertake more obligations and fulfill more commitments in the WTO. The high cost of many factors of production has brought about the outward movement of manufacturing industry, and the structure, direction and increment of China's exports are changing.
The reshuffle of the international freight forwarding industry is intensifying, and the scale among enterprises is expanding. Several leading enterprises in each airport and port occupy the local core transport capacity resources and customs clearance resources. A large number of small, medium-sized and micro enterprises relying on the form of dumping and selling goods generally have difficulties in survival, and the industry oligarchy effect is prominent.
With the development of mobile Internet and cross-border e-commerce, the information gap between industries is being quickly filled, there are fewer and fewer businesses with asymmetric information, it is more and more difficult to make money by relying on a single price difference, customer needs are more diversified and comprehensive, the level of information technology in the industry is higher and higher, and the requirements for employees are higher and higher.
With the emergence of e-commerce platforms, core sales, technology platforms and other elements, as well as the increasingly obvious trend of cross industry cooperation and in-depth integration of upstream and downstream industries, many new directions and topics around vertical industries, subdivided categories, comprehensive services and so on deserve our in-depth study.
