News / Forwarders fear for margins amid volatility and strategy uncertainty

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Forwarders are divided about how 2025 will pan out financially, with the lack of visibility preventing accurate forecasting – and new external factors to account for when ascertaining freight rates. 

The end of the front-loading surge, and lack of certainty over new tariffs, could see a summer lull and overall depressed results for the year. 

“When we started this year, we said ‘OK, 3% to 4% growth would be good, organically’, taking some market share,” Burkhard Eling, CEO of Dachser, told The Loadstar.  

“But quite honestly, it’s nearly impossible to predict. The gut feeling would be that around 2% to 3% should be possible, seeing how we were actually performing in the first four months.” 

Last year, Dachser saw volumes grow 13%, of which 5% was organic. And this year started well, he said. 

“We are feeling this uncertainty in Europe, and our customers are having a hard time dealing with it. The market itself – the first quarter was actually very good, because everybody was preparing for 2 April [US tariff introduction day].  

“The second quarter is not bad, because everybody tries to somehow move stuff, to be prepared until the next news comes. But this is so volatile, this is really not a sustainable flow of goods. 

“It’s one thing to come up with tariffs; it’s another thing to come up with tariffs and put them all on the table – 25% one day, next day 50%. So this uncertainty is the biggest challenge we currently have.” 

While DHL has downgraded its forecast for the year, others haven’t: Kuehne + Nagel has retained its original forecast, despite noting market challenges. 

But another senior forwarder disagreed, saying: “K+N said it would have a good Q2 in airfreight. How did they come to that conclusion? There are a lot of holidays in May around the world. We came to a totally different opinion. 

“Of course different companies have different customers, know-how, and K+N is listed. But there is no consistency in the outlook, no knowledgeable forecasting or planning. No one knows how to get there.” 

Henri Le Gouis, EVP global forwarding at Geodis, told The Loadstar defining the right strategy was increasingly difficult. 

“I think it’s impacting Geodis, like all our customers. It’s not about a massive tariff increase, it’s a permanent change of tariffs.  

“Nobody is able to put in place a sustainable strategy to cope with this, it changes every week. It comes directly from the administration without any filter. So in fact, we are more in damage control mode on the mid-term, long-term management to deal with the consequences. 

“If you change the rules of the game every week, it’s very hard to define a tactic.” 

The real difficulty is a new set of factors beyond the basic economics of supply and demand, the ‘rules-based’ system of trade. 

“What is very difficult for forwarders is to deal each and every year with powerful external factors. By nature they are very difficult to anticipate,” explained Mr le Gouis.  

“Before, we were using demand and capacity to define rate policy, to give some validity to our rates. Now we know that we have to integrate political factors, and climate factors, which are not predictable. And that makes it very difficult to manage our services and our organisation. The only lesson we have to learn from that is we have to be more agile than ever, because this is not going to stop. 

“We’re entering a period where there will be huge political factors affecting global trade. Free trade, unfortunately, is behind us and the regulatory environment is getting more and more complex. And also climate change will have more and more effect on the global situation. 

“The more we work in advance on back-up plans and on contingency plans, the more we secure the global chain. When you are managing a global supply chain, you have to integrate these factors, and you have to build a plan A, a plan B, even a plan C, to make sure that whatever happens, you find a solution.” 

Much of the anxiety is customer-led, he added. 

“Our customers are feeling very worried about these permanent changes, and they also start seeing the potential effect of this stop-and-go politics, because you cannot manage a global supply chain with stop-and-go without creating massive disruptions,” said Mr Le Gouis. 

“We really are concerned about potential dents in the market for the summer.” 

Geodis is – like all global forwarders – exposed in the US, with some 15,000 staff there. 

“But in our business, when a country is affected, the country of origin is also affected too. What happens in the US also has an effect in China, in South Asia.

“What we’ve seen so far is that the rhythm of exports from China to the US has been dynamic from the beginning of the year, because everybody was anticipating the tariff effect – but it’s affecting exports out of Europe. 

“We are seeing a moderate level of export activity out of Europe. So let’s see what will be the next consequences, which type of commodity will be hit finally by the tariff, to which level, and then we’ll see the effect.  

“What we’ll see is that we will have to manage permanent fluctuations and volatility in rates for the rest of the year.” 

The EU currently faces a 10% blanket tariff on most exports to the US – but the White House has threatened a level of 50%. 

“I don’t think any of our customers are generating 50% margin on their products,” said Mr Le Gouis. “So of course, if this was to be maintained, it would have a tremendous impact on our customers. But I don’t see how we could be maintaining such a level without paying a big toll. 

“You know, if everything was easy, you wouldn’t need freight forwarders,” he added.