The Power 25: 3 Forwarders to watch in 2021

Dimerco: Missing from this year’s list of Top 25 forwarders is Taiwan-based Dimerco Express Group , which after multiple years of study-to-robust tonnage growth, took Armstrong by surprise. The company is pursuing a “radical restructure” that began in October 2019. As part of the reorganization, the company has simplified its management structure and has invested heavily in delivering real-time shipment insights through what it calls “Business Intelligence Technology.” While the core aim of BIT is to deliver shipment visibility via any internet connection to Dimerco’s air freight, ocean freight and contract logistics customers, the system also helps inform internal decisions related to contingency planning, multimodal transport and air chartering, according to a statement from the company. “Although the initial outbreak of COVID-19 occurred immediately after Dimerco's first restructure in 2020, Dimerco has nevertheless achieved increased revenue and profitability for the year with more than 35% revenue growth compared to 2019,” Jeffrey Shih, chief executive management at Dimerco, told Air Cargo World . The forwarder’s 2020 airfreight handle fell to about 200,000 tonnes, due to a drop in the number of shipments of about 40,000 compared to 2019, Shih said. The impact of COVID-19 in China had negative effects for the business, “as it represents 50% of our overall group performance,” Shih said. Even though significant airfreight tonnage growth did not materialize in 2020, Dimerco reported year-over-year increases to both revenue and profit, of 35.1% and 182%, respectively. Hitachi Transport System ’s slip from the 2020 list reflects the 3PL’s exposure to consumer and industrial sectors that were heavily disrupted by the pandemic, particularly for its home market in Japan. Traditionally strong export commodities including auto, apparel and cosmetics saw lower volume in 2020, according to an investor briefing following the release of its fourth quarter results for its 2020 fiscal year ended March 31. Some verticals have started to see export demand rebound. “From here on, the automobile-related sector is expected to recover,” according to the briefing. The picture for consumer goods is mixed with cosmetic exports on the rise, while apparel and outdoor recreation gear face a “prolonged” slump. While Hitachi remains focused on traditional verticals, it is also adapting its existing infrastructure to better accommodate e-commerce. Rather than establish dedicated facilities to handle e-commerce, Hitachi said it was adding space in its existing logistics centers. Looking ahead, Hitachi looks to grow through acquisition. “We consider North America, Europe, and Asia as particularly important areas, so we think there will be some M&A projects in those areas in FY2021 and FY2022,” according to the briefing. GEODIS (No. 20): As the only forwarder to watch in 2021 that is also a part of the Power 25, France-based GEODIS stood out for its strong year-over-year revenue growth of 43.2%. The only 3PL reporting a larger increase is No. 7 Apex Logistics International, which is among the forwarders that are being snapped up already in 2021 for acquisition by larger companies. So far in 2021, GEODIS has expanded in multiple areas, from the launch of a new assessment tool and methodology, in partnership with consultancy Accenture, designed to entice retail brands to move away from third-party e-commerce platforms, to growing its infrastructure both in its home market, at Paris’ Charles de Gaulle Airport (CDG) , and in the fast-growing Asia-Pacific market with the opening of a new multiuser facility in South Korea . Its current positioning near the bottom of the list could be improved by further growth or through M&A. GEODIS expanded its logistics network in Poland and Germany, particularly for road logistics, with the acquisition of Polish company PEKAES, completed earlier this year, and has adopted more flexible corporate planning in light of the pandemic. “Sometimes a new opportunity will arise from the crisis, and we need to remain agile to take advantage of that,” Stanislas Brun, SVP of global airfreight, said during an Air Cargo World webinar in March. Of course, like many Power 25 forwarders, GEODIS’ growth prospects and current airfreight tonnage could also make it an attractive target for acquisition. GEODIS’ parent, SNCF Group, is a government-owned entity with many logistics and transportation divisions and subsidiaries. According to Air Cargo World columnist and Logistics Trends & Insights founder Cathy Roberson, there is sufficient reason to believe GEODIS could be an acquisition target in the future. “There’s been a lot of talk about breaking [SNCF] up and selling off parts, including GEODIS,” Roberson said. Whether a break-up will occur remains to be seen, but the expectation of more consolidation among freight forwarders in 2021 and the years ahead remains.

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