The Power 25: How long can the good times last?

MINOR SETBACKS

In another signal that 2016 was kinder to the largest freight forwarders than 2015, no Power 25 company fell off the list from a year ago and none fell farther than two spots on the list.

One company that did slip two places – Crane Worldwide, dropping from No. 23 to No. 25 – also saw its tonnage dip below the 200,000-tonne threshold to hang onto the bottom rung with 195,000 tonnes handled. Bollore Logistics also saw a notable dip in tonnage, from 580,000 tonnes in 2015 to just 569,000 tonnes last year, earning it a two-spot fall to a still-respectable No. 10 on the list.

The handful of companies that fell one spot, such as Sinotrans (No. 11) and Expeditors International (No. 6), actually saw minor increases in tonnage in 2016. Expeditors, Armstrong said, might have seen a larger increase in tonnage last year, but was “so tied to the China-U.S. trade lane. A lot of growth came from the Asia-to-Europe lane, but Expeditors doesn’t participate in that as much.”

CEVA Logistics, however, which fell to (No. 13), did see a 30,000-tonne drop from 451,000 in 2015 to 421,000 in 2016. Agility (No. 14) and Pilot Fright Services (No. 23) each fell a spot, but stayed about even in tonnage.

Timo Stroh, head of global airfreight for Dachser Air and Sea Logistics, said the German 3PL had endured a fairly stagnant airfreight market for much of 2016, until the market saw a “remarkable” rebound in the 4th quarter, allowing it to finish slightly down in airfreight tonnage (272,100 tonnes) but maintain its No. 19 position on the Power 25.

Dachser was also able to integrate its core operational system, called “Othello,” across its entire air and sea logistics network, which Stroh said was one of the company’s most important projects in 2016.

For Taiwanese 3PL Dimerco Express Group, tonnage at its airfreight forwarding division was up 8.4 percent, year-over-year, to 219,000 tonnes in 2016, but it was not enough to budge it from the No. 24 spot on the Power 25 list.

The majority of the commodities handled by Dimerco were traditionally semiconductors and consumer electronics, said Joey Chou, corporate vice president of business development. But since 2016, Dimerco has focused more on targeted vertical industries, including automotive, oil and gas, aerospace, apparel and textiles, medical devices and, especially, cross-border e-commerce and solar energy, “which contributed to airfreight increase in 2016,” he said.

For example, Dimerco started working with Revolve Clothing, a well-known Los Angeles based luxury clothier, at the end of 2016 to connect the brand with online consumers in China and Hong Kong, providing faster, trackable deliveries of their goods. Chou cited eMarketer’s analysis, finding that half of China’s population will be shopping online in four years, leaving room for more growth. By 2019, he said, one out of every three of China’s retail dollars will be spent online, “the highest ratio in the world.”

Nobutoshi Torii, president and CEO of Kintetsu World Express (No. 12), said the merger with APL Logistics from last year will finally start showing some results in 2017, as Kintetsu recently started joint sales with APL to get business from APL’s major accounts. With the economic slowdown in China, the strategy for last year, he said, was to focus on automotive, electronics and healthcare business in the intra-Asia and trans-Pacific eastbound lanes.

And the outlook for 2017? “Although it is geopolitically unstable,” Torii said, “it is a good start compared to the first quarter of 2016.”