Articles and Education

Investing in Freight Forwarding: Why Buy an Existing Business

In the ever-evolving landscape of global commerce, the freight forwarding industry stands as a critical pillar. This industry connects businesses, bridges economies, and ensures the smooth flow of goods across borders. For entrepreneurs considering diving into this lucrative arena, the question often arises: should you build a freight forwarding business from the ground up or acquire an existing one? In this comprehensive guide, we make a case for why 2023 is an opportune moment to purchase an established freight forwarding business and how it can yield significant returns on your investment.

A Flourishing Global Market

Before delving into the specifics, let’s take a step back and examine the global freight forwarding market. This sector is anticipated to reach USD 168.99 billion in 2023, with a projected CAGR of 4.16% that could see it amass USD 207.19 billion by 2028​1​. This projected growth is a testament to the industry’s resilience and adaptability in the face of dynamic international trade landscapes and evolving logistics technologies.

Entering this thriving market via the acquisition of an existing freight forwarding business allows you to hit the ground running. You gain immediate access to a slice of this multi-billion dollar pie, bypassing the challenging startup phase that new businesses must navigate.

The Advantage of Immediate Cash Flow

When you acquire an existing freight forwarding business, you inherit a functioning infrastructure complete with an existing customer base. This means you can enjoy immediate cash flow – a significant advantage over starting a new business, which often involves a period of low or no revenue until the business can establish itself in the market.

Brand Reputation: The Trust Advantage

In the freight forwarding industry, trust is currency. Businesses, large and small, entrust freight forwarders with their valuable goods, expecting them to navigate complex logistics networks, customs regulations, and deliver on time. As such, having a well-known name and a positive reputation in the industry is invaluable.

Acquiring an established business in this space means you inherit a brand that clients already know and trust. This saves you years of marketing efforts and reputation-building that would be necessary if starting from scratch.

Risk Mitigation through Proven Business Models

Every business venture comes with an element of risk. However, this risk is significantly higher for startups. Existing businesses, on the other hand, come with proven business models, a roster of existing customers, and historical financial data.

This information allows for more accurate forecasting and strategic planning, reducing the risk of unexpected hurdles.

2023: The Ideal Year for Purchase

The year 2023 presents a unique window of opportunity for buying a business, especially in the freight forwarding industry. This is due in part to a demographic shift – many baby boomers, who built their businesses during the trade booms of the late 20th and early 21st centuries, are now reaching retirement age.

This generational shift has resulted in a wave of opportunities with business owners looking to sell their established, PROFITABLE businesses.

As a potential buyer, this means you have a wider selection of businesses to choose from, increasing your chances of finding one that fits your investment objectives and business vision.

Leveraging Expertise with Albion

At Albion, we specialize in the complexities of the freight forwarding and customs brokerage businesses. Our experienced team of professional’s work with sellers to match them with the RIGHT buyer/candidate.

That means that working with our clients will help you ensure you’re presented with potential purchases that make sense for your plans and the sellers.

Whether you are an experienced investor in the logistics space or a newcomer looking to make a smart entry, you’re in the right place to find the right business to add to your portfolio.