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How Freight Services Influence Manufacturing and the Growth of the Economy

The manufacturing industry, despite facing numerous hurdles such as the economic downturn and globalization, is still one of the most important pillars of our nation’s economy. In fact, there has been some significant positive growth over the past several years, and many analysts are highly positive about the future of the industry.

According to recent data provided by the National Association of Manufacturers:

  • Manufacturers currently contribute $2.09 trillion dollars to the economy. In 2009, that figure was $1.73 trillion.
  • For every dollar spent for manufacturing, $1.37 is added to the national economy.
  • 17.6 million jobs are supported by the manufacturing industry, with 12 million employed directly by manufacturers.
  • Employees in the manufacturing earn nearly $15,000 more than the national average. (2013)
  • Manufacturing is a leader in innovation, performing more than three quarters of the R&D in the U.S.

The data clearly points out that the manufacturing industry is vital to the U.S. economy, and shows no signs of collapse. But one unexpected shot in the arm for the industry may be freight services, which is providing a good deal the momentum that manufacturing needs to remain viable in the future.

The Relationship between Manufacturing and Freight

The basic foundation of the relationship between these two industries is simple. Manufacturing companies require materials in order to create a product. Freight companies deliver the materials necessary for such manufacturing. Once a product is completed, manufacturers then need to transport their merchandise. Freight companies manage this distribution as well. Thus, freight services are essential to any manufacturing endeavor, and transporting to distant places, delivering on time and performing at a reasonable cost will have a profound effect on a manufacturer’s bottom line.

Yet in the past few years, the freight services industry has advanced radically, thanks to the influence of new technologies, as well as the Internet. Now, there is suddenly access to a wider selection of small, medium, and large scale freight carriers, as well as numerous brokers and forwarding services that manage the various logistics of the supply chain. With burgeoning competition within the freight industry, the manufacturing industry is seeing better prices and better performance out of freight related services.

The following are ways Freight Services are continuing to improve:

Freight Brokerage: Shippers and carriers have been able to enjoy the services logistical services provided by brokers for years. But new software and concepts such as Freight Exchanges has reinvigorated the industry, quickly connecting shippers and carriers looking to move loads at a competitive rate.

Big Data: The trend to use Big Data is disseminating across numerous industries, and the freight industry is no different. Understanding past trends and predicting future ones are far better accomplished through the analysis of every possible piece of data, and supply chains are already benefitting from more efficient management.

Dimensional Pricing: Solutions such as dimensional pricing has made filling freight space and pricing much more scientific and accurate. While some are bemoaning an increase in shipping costs, there will positive long term effects, such as a drive towards more efficient packing and greater sustainability.

Cloud-based Sharing: By sharing information online, as well as providing enhanced communication over voice and data networks, the shipper-carrier relationship has become much more robust. Everything happens in real-time now, which has optimized workflow and streamlined the supply chain.
Real, Measureable Growth

Within areas that have a healthy manufacturing sector and corresponding freight services, there has been opportunity for job growth. A study by the Chicago Metropolitan Agency for Planning (CMAP) found that in Chicago, which has an enterprising ‘cluster’ of manufacturing and freight companies, there was 20% spike in new jobs in manufacturing, freight services, and brokerages between 2010 and 2012, showing the close relationship between the three.

Even if Chicago’s levels of success might not be repeated across the board, this still bodes well for the rest of the nation. Any region that has boasts a healthy manufacturing sector has the potential to be productive and contribute to both the local and national economy. And with an accompanying network of freight service providers, manufacturers will be able to stay efficient, keeping on track with their production and distribution schedules.

Overall Benefits of How Freight Services Aid Economic Growth:

As manufactures are able to take advantage of more turn-key and cost effective freight services, they are able to better focus on growing their own business. With freight broker and logistical services, such as GlobalTranz, the process of shipping, as well as finding new shipping routes and carriers has never been easier. All-inclusive software platforms will help support the upward trend for freight services, which in turn benefits the manufacturing industry and the economy at large.



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