2015 will herald some very interesting times ahead for the U.S. forwarding industry. Europe's struggling economy, the collapse in the price of oil and other mineral resources, the high value of the dollar, and the China bubble about to burst will all lead to radically changing international freight patterns.
Looking into my crystal ball, I liken 2015 to 1990, when the Japanese economy was turned upside down. Since then, deflation has kept a lid on Japan's economy. I believe deflation is already entrenched in Europe with the same consequences as what happened to Japan. It will remain the major driving factor for many years to come.
With the world awash in cheap oil, commodities hitting lows and the United States self-sufficient, many African and South American nations along with Russia will be adversely affected. The consequent upward pressure on the U.S. dollar might slow down the mini export boom we have experienced during the last five years.
In my opinion, China's days as the powerhouse economy that drives the world are numbered. Japan's problems started with the banks and real estate. This is exactly where the domestic economy of China will implode. The booming property market has fueled inflation. If Japan still can't solve the 20-year problem of deflation, I cannot see the Chinese being any different.
So where does that leave the U.S. forwarder? Large players will be caught up in the global turmoil that awaits them. Small to midsize forwarders, I believe, are resilient, and they will find a way to again cut their cloth accordingly. Who will be the real winners? The forwarders that also sell domestic services; they are going to boom. Why? Because America's domestic economy will be keep moving forward.
Julian Keeling, CEO, Consolidators International