Freight Forwarding Challenges in 2025 and Beyond

Freight forwarders face several challenges in 2025 and beyond. These include oversupply in maritime shipping, lagging adoption of digital tools, and a growing driver shortage in Europe, all of which are putting pressure on the industry.

 

Balancing Oversupply

The forwarding sector is navigating a challenging scenario, with capacity expanding and freight demand dropping. The size of the ocean fleet is projected to expand to unprecedented 2.7 million TEU, reflecting a 7.8% increase. In contrast, container volumes worldwide are expected to grow modestly by 3% to 4% this year.

With fewer goods requiring transportation and surplus capacity, maritime freight rates might drop and make ocean shipping more economically appealing. Ground freight forwarders, competing against these lower-cost options, might need to revise their pricing strategies or seek other ways to remain competitive. This could involve focusing on the logistics of goods that are challenging to transport by sea such as extremely time-sensitive pharmaceuticals, live animals that require frequent care, and proprietary designs that demand maximum security. Alternatively, forwarders might focus on serving regional markets with consistent demand where the logistics requirements are less suited to long ocean voyages.

 

Closing Digital Lags

In the European logistics industry, 69% of freight forwarders report having adopted digital innovations, including customs brokerage along with warehousing logistics and transport management solutions. However, many forwarders still lag in integrating automated invoicing, online quotation, and e-booking capabilities.

The absence of automated invoicing, in particular, increases the risk of discrepancies and delays in payments. Without online quotation capabilities, forwarders fail to provide instant pricing which can lead to a loss of customers to competitors who offer immediate, transparent rates. Lastly, the lack of e-booking capabilities limits the ability to handle high volumes of orders efficiently and impacts the forwarder’s responsiveness during peak demand periods.

To mitigate these issues, freight forwarders should prioritize the integration of digital tools that streamline operations from end to end. Additionally, investing in robust training programs for staff to effectively navigate specific software functionalities will facilitate smoother technology transitions and sustain operational efficiency. Moreover, forming strategic partnerships with tech companies could accelerate the adoption of advanced systems that streamline service delivery.

 

Navigating Driver Shortages

Forwarders are contending with a driver shortage largely because a large proportion of the workforce is aged 55 or older across various global regions. What is more, a recent report indicates that the percentage of drivers under 25 remains at 12% or less in Europe, Asia, and North and South America. As this younger cohort is insufficient to replace retiring drivers, the shortage is expected to worsen in the near future.

To address shortages, forwarders can adopt strategies such as offering sign-on bonuses to attract new drivers and introducing retention rewards to encourage long-term commitment. Additionally, instead of relying solely on fixed hourly pay, forwarders can align compensation with actual output. Metrics such as fuel efficiency, on-time pickup rates, cargo damage incidents, and vehicle maintenance compliance can be used to reward drivers.