Interview Synopsis

Forto – digital freight forwarding trends & competitive threats

  • Private Equity
  • Industrials
  • Europe

“This is a good time to be a freight forwarder and logistics company,” a former SVP at Kuehne + Nagel Co Ltd told Third Bridge Forum. “Margins are so high.” However, the market is highly competitive and although digital seemingly has an edge today, legacy players are catching up.

Legacy players catching up with digital freight forwarders

The Interview, which focused on digital freight forwarder Forto, began with an overview of the company’s client sweet spot: customers with complex supply-chain processes. “I believe  that Forto are quite strong in terms of what they concentrate on, which is the business export out of China, import into Germany,” the specialist said. The challenge, we heard, is that “they aren’t everywhere”, meaning their core client base is typically small to medium customers with specific requirements in specific locations. 

The expert then turned to Forto’s pricing differentiation and weaknesses across routes, before commenting on the company’s outlook beyond China-Germany. As working with partners can be inefficient from a cost perspective, Forto is looking to bolster its capabilities in additional geographies, we were told. “Also, you’ve got to bear in mind, apart from the carriers, the freight forwarders, there’s also a warehousing requirement.” This is a relative weak spot for Forto.

Towards the end of the Interview, it was noted that the “services that companies like Forto offer are appropriate for a certain type of business, with a certain type of product profile, at a certain point in time”. Ultimately, there’s a “lifespan for some of these digital players, especially when their customers start to do something for themselves”, we heard. 

“That’s the prognosis, and therefore, over a period of time, 5-10 years, the likelihood of there being a digital freight forwarder saying, “I am the best at digital,” no. They will just be a freight forwarder.”

To access all the human insights in Third Bridge Forum’s Forto – digital freight forwarding trends & competitive threats Interview, click here to view the full transcript. 

The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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