Beneath the seemingly calm surface of container shipping, a complex dance of strategy and survival plays out between ocean carriers and freight forwarders. The towering stacks of containers and massive vessels cutting through waves tell only part of the story—the real drama lies in how carriers allocate capacity between direct shippers and freight forwarders, a decision that can make or break forwarders' businesses.
Freight Forwarders: From Supporting Players to Market Leaders
The past decade has witnessed a remarkable transformation in the role of freight forwarders in the Trans-Pacific trade lane. Once considered mere intermediaries, they have grown into dominant market players, now commanding nearly half of all shipments. However, this ascent hasn't been without challenges, as carriers constantly adjust their strategies, leaving forwarders navigating uncertain waters.
Carrier attitudes toward forwarders serve as a barometer for the industry. Some carriers prefer working directly with beneficial cargo owners (BCOs), viewing forwarders as supplementary. Others rely heavily on forwarders, treating direct shippers as secondary. Most attempt to strike a balance between the two, aligning their forwarder allocations with market averages.
Market Dynamics: The Carrier Strategy Compass
Carrier assessments of market conditions directly influence their forwarder ratio decisions. When carriers anticipate tight capacity and BCO willingness to pay premium rates—as seen in 2022—they increase direct shipper allocations. Conversely, during market downturns with lower contract rates, carriers tend to maintain or boost forwarder shares.
Yet even in bullish markets, strategies vary significantly among carriers. Some aggressively pursue direct shippers while others maintain forwarder-focused approaches. The market reveals no single formula, only constantly evolving tactics.
Over the past decade, major carriers have implemented strategic shifts along two primary directions:
- From over-reliance on direct shippers to increasing forwarder shares toward market averages: This approach aims to expand market share and boost overall revenue.
- Further reducing forwarder allocations to concentrate on direct shippers while expanding end-to-end logistics services: This strategy prioritizes profit margins over volume.
Following the 2021 market boom, carriers significantly adjusted their forwarder and direct shipper ratios in 2022, squeezing forwarders' operating space. However, as market conditions shifted again, the landscape returned to familiar patterns—demonstrating the difficulty of market predictions and the necessity of flexible strategies.
Three Years of Data: Tracking Carrier Forwarder Allocations
Analysis of the past three years (2019, 2021, and 2022) reveals significant changes in forwarder allocations among major Trans-Pacific carriers:
- Methodology: Calculations based on arrival date volumes, aggregating the top 600 forwarders per carrier as a percentage of total volume, with a 0.1%-0.5% margin of error.
- Timeframe: 2019 serves as the pre-pandemic baseline; 2021 represents an exceptional year; 2022 shows gradual normalization.
Overall Trend: Forwarder Share Peaks Then Recedes
The data reveals a clear pattern:
- 2019: Forwarders handled 48.2% of Trans-Pacific volume—a decade high at the time.
- 2021: Forwarders reached their zenith at 53% market share.
- 2022: The ratio retreated to 49%, approximating 2019 levels.
While the overall forwarder share normalized, individual carrier experiences varied dramatically.
Carrier Strategy Breakdown
CMA CGM: The French carrier demonstrated exceptional market timing, adjusting its forwarder ratio from 41.7% (2019) to 48.3% (2021) before swiftly reducing it to 41.9% (2022) to capitalize on premium direct contracts.
MSC: The Swiss-Italian carrier made aggressive bets, surging from 42.3% (2019) to 64.7% (2021) forwarder share before settling at 63.1% (2022). This high-risk approach yielded mixed results when markets shifted.
Maersk: The Danish giant maintained its decade-long direct shipper focus, with forwarder ratios dropping from 28.2% (2019) to 10% (2021)—the industry's lowest—before a slight recovery to 16.4% (2022). Its end-to-end strategy faces challenges in softening markets.
Evergreen: The Taiwanese carrier followed a conservative path, maintaining forwarder shares between 30% (2019) and 38% (2022), consistently below competitors.
ONE: The Japanese carrier showed remarkable stability, maintaining forwarder allocations between 54-58% throughout the period.
COSCO: The Chinese carrier demonstrated balanced flexibility, peaking at 52% forwarder share in 2021 before adjusting to 44% in 2022—a moderate approach that may prove advantageous long-term.
ZIM & Wan Hai: These rapidly expanding carriers aggressively grew forwarder shares, with ZIM reaching 67% (2022) and Wan Hai hitting 73%—second only to Matson's 75%.
The Forwarder Imperative: Balance and Adaptability
No single carrier strategy proves universally superior—each reflects different market positions and objectives. Forwarders remain essential market participants, though their roles continue evolving with market conditions.
Recent volatility demonstrates the risks of extreme market bets. Maintaining balanced direct and forwarder allocations, with measured adjustments to market shifts, appears the most sustainable approach for carriers. For forwarders, understanding carrier strategies and selecting appropriate partners while enhancing service capabilities will determine survival in this challenging environment.