With the global economic downturn, the world is experiencing inflation, and the import and export trade of European and American countries has been greatly affected. As the economy and trade have been affected, the performance of the global transportation and freight forwarding industries has also been greatly affected. Since the freight forwarding industry will gradually decline from 2022, the performance results this year are not very ideal. Therefore, subsequent layoffs may be unavoidable. According to media reports, the current freight forwarding industry is currently a bit out of control. It can be said that the freight forwarding industry has reached its peak in 2021, and all major multinational giants have made a lot of money. In the two years after the peak, the performance of many large companies was somewhat inflated. As the market deteriorates and performance pressure mounts, many companies have almost exhausted their reserve funds. Nowadays, the senior management of many large freight forwarding companies are very panicked about the market. What kind of decisions need to be made next is a difficulty that many companies have to face.
Now this situation is not limited to a certain company or even a certain industry. This panic has been reflected in many countries and many industries. Other cross-border freight or other third-party logistics providers have also been affected. The annual profits of many freight forwarders have dropped significantly, and some are even lower than before the epidemic. This situation is expected to continue in 2024, including declining profit margins, reduced annual profits, or large-scale layoffs. Industry insiders say they suspect many large multinational companies are facing this situation. Many companies may be laying off workers faster than imagined. DHL Global Forwarding also made similar claims. Many companies have similar plans.
Ceva Logistics has experienced many management changes. He has appointed new regional heads, whose main purpose is to reduce costs in order to combat the economic decline in the market. There is also news that before the end of this year, Ceva’s Latin American business will lay off more than 100 employees, and some employees will also be laid off in the Asia-Pacific region. At the same time, the European business will also cut expenses. Ceva has reportedly implemented a travel ban and terminated hiring. While pushing for lower costs, especially when Ceva has such a close relationship with CMA CGM, meetings with other carriers have little meaning. While the hiring freeze has impacted operations and customer service, with teams struggling to keep up with workload, it seems that isn’t the case for management. Recently, Ceva CEO Mathieu Friedberg said that this is a new challenging period, and the logistics and supply chain industry is facing worker shortages in many local and regional economies.
Many freight forwarders are making similar moves, with many experts saying that 2024 will be the worst year in the logistics industry in the past 20 years. In order to cope with the sluggish market and global inflation, major freight forwarding companies will soon provide their own response strategies. Either large-scale layoffs, large-scale cost reductions, or streamlining management personnel are all unknown and huge challenges we will face next year.
