In February 2022, a freight forwarder became one of the most valuable startups in America. Flexport raised $935 million at an $8 billion valuation, in a round led by Andreessen Horowitz and MSD Partners, with Shopify and Michael Dell on the investor list (CNBC covered the round the day it closed). The valuation had nearly tripled since 2019. A month later, Berlin-based Forto raised $250 million at a $2.1 billion valuation, with A.P. Moller Holding, the parent of Maersk’s owner, among the backers. The shipping establishment was funding its own disruptors.
Moving and relocation operators hear a version of this story constantly, usually as a threat about their own future: digital platforms are coming for the customer. Freight forwarding is worth studying because there the platforms already came. The money arrived, the incumbents responded, the cycle turned, and the results are on the record. Digital forwarders took the customer conversation. The question an operator should ask is the uncomfortable one underneath: did the forwarders end up better or worse off?
The answer is more specific than the hype in either direction, and it has very little to do with software quality.
What the freight forwarding industry looked like before the money
The pitch that raised billions rested on a simple observation about how freight was bought. As late as 2018, McKinsey described an industry where telephones and email were “still the dominant channels, just as they were decades ago.” Only 60 percent of carriers and forwarders offered online registration at all. The share offering online quotes was lower still. For any customer not wired in through an EDI connection, fully digital booking mostly did not exist.
Meanwhile the customers were moving. Smaller and midsize shippers were going online to find forwarders whether or not the forwarders were there to meet them: McKinsey noted Google search volume for freight forwarding queries growing 16 percent a year since 2014. An industry that turns over hundreds of billions of dollars a year was taking its orders the way it had in 1995, while its next generation of customers searched for it in a browser.
That gap is what the venture money bought. Not trucks, not ships, not warehouses. Flexport and Forto built the interface where the customer asks the first question, gets the first price, and books. Everything the a16z thesis says about software eating an industry applied to exactly one layer of forwarding: the front door. The physical work underneath, the customs brokerage and consolidation and carrier contracts, stayed as analog as ever. The digital forwarders quietly staffed themselves with the same licensed professionals as everyone else.
Freight forwarding software became table stakes
The clearest evidence that the digital forwarders found something real is what the incumbents did next. They did not dismiss the threat. They rebuilt their own front doors, at cost, in public, and described it as existential.
In May 2020, DHL Global Forwarding launched myDHLi, a customer portal combining online quotation and booking with tracking, documents and analytics. The head of the division called digitalization “a cornerstone of our strategy 2025.” Kuehne+Nagel, the largest sea freight forwarder in the world, made its digital platform one of the four cornerstones of its Roadmap 2026 (its 2022 annual report lays the plan out). The platform continues the eTouch automation program the company started in 2017 to serve high-volume shippers with less manual handling. When the two biggest names in the freight forwarding industry spend years rebuilding how a customer gets a quote, the argument about whether digital booking matters is over.
Notice what this did to the market for freight forwarding software. It stopped being a differentiator and became the ticket price. A forwarder with instant online quoting no longer stands out; a forwarder without it now explains itself. The customer expectation reset in under a decade, and it reset for everyone, including the forwarder who never bought so much as a booking plugin. That is the pattern worth writing down, because it transfers to any industry watching its own version of this: the platforms do not have to win for the customer’s standard to change permanently.
The pattern that transfers is the reason this publication keeps returning to a single question: who owns the customer.
The margin question nobody’s pitch deck led with
The standard objection deserves a straight answer before the numbers. Throughout this period, forwarding professionals said that the business is relationship-driven and software cannot replace what they do. They were right, and it did not save the margin. A customs entry still needs a licensed broker. A rolled booking in peak season still gets fixed by a person who knows someone at the carrier. The relationship argument wins every debate about the work and loses the one that matters, because the platforms never competed for the work. They competed for the first phone call, and the first phone call is where the price gets anchored and the customer gets kept.
A forwarder’s economics leave very little room before a change in who owns the customer becomes a change in what the business earns. McKinsey’s analysis of forwarder earnings puts 62 to 85 percent of revenue straight through to carriers as purchased capacity. What remains converts to operating margins of 1 to 11 percent. By 2022, gross profit margins sat at a ten-year low even while absolute profits spiked on crisis-era rates. The same firm’s 2018 scenario for digitization projected the incumbent profit pool shrinking 20 to 30 percent as transparency squeezed rates. It projected 10 to 15 percent of the pool ending up not with the platforms but in shippers’ pockets.
Run that structure through a worked example. A mid-sized forwarder billing $20 million a year at a 15 percent gross margin holds $3 million to run sales, operations and compliance before earning a cent. Shift a quarter of that book from directly won business to bookings that arrive through someone else’s platform, priced against instant quotes from every competitor on it. Even two points of margin surrendered on that quarter takes $100,000 straight out of the $3 million that pays for everything. The trucks move exactly as before. The work is identical. Only the origin of the booking changed, and the P&L noticed before anyone else did.
Then the cycle did what cycles do. Transport Intelligence recorded the global forwarding market contracting 1.3 percent in 2023 as pandemic-era rates unwound. In the US brokerage layer, the adjacent intermediary business, the Transportation Intermediaries Association’s Q1 2024 member data showed total revenue down 21.4 percent year over year, with gross margin percentage falling again on top of it. Everyone standing between a shipper and a carrier got squeezed at once, digital or not.
One number would settle how far the customer relationship has actually migrated: the share of SME freight bookings that now originate on a digital platform. That number does not exist in any credible published form. Market-research shops sell reports slicing a “digital freight forwarding market” whose definitions do not survive contact with each other, and the closest real measurement remains McKinsey’s 2018 registration statistic. An industry this large does not publish the one figure that would tell its members where their customers went. That silence is itself informative. The moving industry has the same blind spot, and this publication has complained about it before.
Did the forwarders underneath end up better or worse off?
Here the story turns on the disruptors themselves. In 2023, with freight rates collapsing, Flexport cut staff twice. The October round alone removed roughly 20 percent of about 3,500 employees. It came weeks after founder Ryan Petersen returned as CEO, ousted his successor, rescinded 55 signed offer letters, and told staff the goal was to return to profitability by the end of the following year. An $8 billion valuation had met the same rate cycle that squeezes every forwarder, and it turned out a digital forwarder’s margins were still forwarding margins.
So the honest scorecard reads like this. Software did not replace what forwarders do. Nobody’s laptop cleared customs. What the decade of digital freight forwarding replaced is who the customer talks to first, and that turned out to be the only ground worth holding. The forwarders that came through with their economics intact are the ones whose customers still ask them for the price directly, whether the asking happens on a portal the forwarder owns, like myDHLi, or over the relationships the sales team kept warm. The forwarders that lost are not the ones that skipped a software purchase. They are the ones that drifted into fulfilling bookings they no longer originated. They carried the trucks-and-licenses half of the business while the enquiry, the pricing conversation and the repeat customer accrued to someone upstream, at whatever margin the upstream party left them.
That split, owning the enquiry versus fulfilling someone else’s, is the entire lesson, and it is not a technology lesson. The technology merely decided it faster.
What a moving operator should take from this
The moving industry’s own version of this argument is made at length in who owns the customer, and the freight sale’s specific anatomy, the buying committees and the deals that die at qualification, already has its own piece on this site. Hotels ran the pattern first, and that story ended with the intermediary’s commission as the largest line on the P&L. This article’s job is narrower: to report that in freight, the near neighbor of every relocation business, the experiment has already run to a result.
The result: the interface moved, the expectation reset for everyone, the intermediary layer’s margins compressed, and the companies that kept their economics were the ones the customer still contacted first. Operators who mostly fulfil work that arrives from upstream can be excellent businesses, and that path has real logic to it. But it is a choice with a price attached, and freight has now published the price.
Which makes the diagnostic for any operator with a freight book, or a moving book, a single question with a number in it. Of the bookings handled in the last twelve months, what share originated with the company’s own name, its own site, its own phone number, rather than arriving through a platform, a broker or a portal? And has that share moved over the last three years? In freight forwarding, the businesses that never tracked that number discovered, a decade later, that it had been falling the whole time.
Ships approaching an unfamiliar harbor have needed a local pilot for as long as ports have existed, someone who knew that particular channel’s sandbars and currents well enough to bring a vessel in safely. The pilot never owned the cargo or the ship. He owned something more durable: knowledge of one specific passage, earned over years, that every ship still had to pay for, one entry at a time. Digital freight forwarding automated the function without changing who actually gets paid for knowing the way through.
