Contract logistics is well-known as the driving force for the freight forwarding market and is opted commonly. The market has witnessed a growth in its study period resulting in a single digit CAGR. Food and beverages have been the market’s propelling force as most of the customer spending is towards the same. Future trends in the market aim on Africa having less trade with developed nations and more with underdeveloped nations.
According to the report analysis, ‘Africa Freight Forwarding Market Outlook to 2023 – By Countries (South Africa, Kenya, Tanzania, Uganda, Nigeria, Namibia and Botswana), Mode of Freight (Road, Rail, Air, Sea and Pipeline), By End Users (Food and Beverages, FMCG, Industrial and others) and by Contract Logistics and Integrated Logistics’ states that the African freight forwarding market is extremely registered by international players. The road freight market is slightly fragmented in a few regions. The industry is at a growth stage in terms of parameters such as technology, proficiency and service portfolio but not pricing as the logistic cost is too high leading to retrenchment of manufacturing segment in the GDP. There is also a shakeout happening of smaller firms that are incapable to sustain in the competitive environment and a number of mergers and acquisitions are taking place in an effort to augment the market shares.
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The foremost end users of freight forwarding services in Africa comprise the Food and Beverage, FMCG and Industrial sectors. The F&B sector has been in requirement due to the slow consumer spending behaviour of individuals in Africa which has also spurred South Africa’s retailers to enlarge into the sub-Saharan region. With new innovations, the industrial sector is also observing lot of potential and it has been projected that Business-to-business spending in manufacturing across Africa is predicted to reach USD 666.3 billion by 2030.
The Africa freight forwarding market is registered by contact logistics. The market is registered by few international players in each country. Without 3PL, the supply chain would be non-existent in Africa. Around urban areas, the traditional model of using delivery trucks and contracting 3PL for supplying large retailers is utilized. In areas which are hard to reach, small-scale 3PLs are utilized to convey products to small-scale retailers. Owing to infrastructural challenges, big market players desire to outsource services to local transporters and aim on their core competencies. Companies do not wish to engage their own logistics arm since it comprises capital investment and a lot of hassle.
The market is projected to develop at a positive single digit CAGR and the foremost growth drivers would include growing requirement intra-regional trade with the development of projects such as AfCFTA. The growing international trade volumes and domestic manufacturing are predicted to increase the requirement of freight forwarding services. The growing year on year investment by the government of each state on infrastructural projects such as SGR for railways, and enhancing the state of road, sea and air transport network is also observed to positively impact the market. Owing to such reasons, new firms endure to enter the market despite any tariff or trade barriers.
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Africa Freight Forwarding Market Analysis
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