The e-commerce market is expanding. E-commerce passed $2 trillion in 2017, reports John D. Schultz of Logistics Management with sales expected to surpass $3.2 trillion by 2020. Although this sounds great for most industries, it represents a major problem for the freight trucking industry. Amazon has already taken extensive steps to establish itself as a leader in full truckload, less than truckload, multimodal, small package and last-mile delivery services. As a result, shippers across the globe are looking for ways to keep up with the Amazon’s unrelenting approach, and these trends in trucking and freight reflect a few of the key ways shippers, third-party logistics providers and truckers will respond 2018.
The Freight & Transportation Management Trends to Know in 2018
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Freight Forwarding Will Undergo Digital Transformation
Freight forwarders will have great opportunities in 2018 to take advantage of the increased demand on shippers. As explained by Zvi Schreiber via Supply Chain Brief, decreasing profit margins and the demand for scalable technology will result in more carriers using digital channels to sell product directly to shippers. Freight forwarders will interact with customers online and automate back office procedures to reduce delivery delays and associated costs.
Freight and Trucking Rates Will Evolve
Freight and trucking rates will reach new heights in 2018 as the truck driver shortage continues to worsen, putting even more pressure on the already fully loaded capacity crunch. Although the obvious solution to the truck driver shortage is to increase rates, carriers and transportation providers are holding out in the hopes that autonomous trucking and new technologies may pave the way for a low-cost solution. Unfortunately, the technologies, as well as regulation, governing autonomous trucks remain in infancy, so widescale deployment of fully autonomous trucks, excluding driver-assisting technologies is still a bit far from realization. But that is not stopping others from trying. For example, Tesla plans to build a fleet of 500 autonomous trucks, says Kirsten Korosec of Fortune.
Compounding this problem, diesel costs are expected to increase, says Road Scholar Transport, and consumers are demanding low-price products and zero-cost shipping. Moreover, consumers want the product here yesterday, not tomorrow, and consequently, shippers are faced with paying higher freight rates to access limited capacity.
Truckers Will Respond as the ELD Is Now in Effect
The Electronic Logging Device (ELD) mandate is now in effect and one of the bigger trends in freight and trucking for 2018. The ELD mandate will dramatically reduce the number of hours truckers can drive. Although truckers have been advised for years to reduce driving hours and take frequent breaks, the ELD mandate effectively eliminates the “missing entries” in the tracking log. Failure to adhere to hours of service regulations, as exhibited within each truck’s ELD, could result in stiff penalties and fines against the trucker, carrier and even shippers. Similarly, this equates to lower wages for truckers, so they will demand higher wages or look for alternative employers, says Michael Levans of Logistics Management.
Last Mile Delivery is Quickly Rising in the Ranks of Trends in Trucking and Freight
Long-haul trucking traditionally was a pickup and then offload at a distribution center or customer location, but increasing pressure for more last-mile deliveries will put pressure on carriers to offer more services beyond traditional pickup and offload practices. Unfortunately, as carriers retool these services, they must also face the pressures of the driver shortage, ELD compliance, and increase demand. How will carriers offer these services to keep up with a changing market? Many will partner with last mile carriers who specialize in this service. In fact, Cerasis is now working with both traditional LTL carriers who then hand off the last mile to a specialist. Our shippers are now able to book traditional shipments and last mile shipments, selecting options such as room of service, in order to achieve a last mile shipment efficiently.
As we look to the future, we may also see something extraordinary. A truck that is also a manufacturing facility! Imagine a truck that has 3-D printers capable of manufacturing and delivering products along the route? Now, maybe that’s way out there as we look at the trends in trucking and freight for this year, but are we really that far off?
The Uberization of Freight Will Redefine Vendor Freight Management
The Uberization of freight will have additional impacts on tracking for vendors too. Vendors can no longer rely on shippers for carrier selection, preferences and pricing, yet shippers will still require adherence to the inbound freight routing guide. Vendors that have not previously considered Uber-like technologies for freight transportation will need to explore and select truck-sharing providers within the coming year. Meanwhile, platooning technology, turning a series of trucks into a trainlike snake on the road, reducing the space between drivers and maximizing fuel efficiency, is already on the horizon, explains Dan Goodwill & Associates.
Mobile Technology Becomes a Cornerstone of the “Cab”
Speaking of Uber and other sharing apps, mobile technology will be central for trends in trucking and freight in 2018. Truckers will begin using more technology in the cab. This will reduce delays associated with routing, while reducing the amount of work required by truckers. Do not think about driving itself, but instead, consider the costs associated with truckers for filling out endless stacks of paperwork. Automating the process will reduce the amount of time drivers spend waiting at yard gates, for unloading or loading, or deadhead. Through mobile technology, drivers can receive real-time updates, avoid accidental violations of hours of service requirements, monitor fuel costs and track maintenance and simplify other processes along the way.
Trends in Trucking and Freight May Extend in Other Directions
At the beginning of 2017, the use of autonomous trucks seemed like an idea that would never come to fruition, and while self-driving trucks and cars are not yet readily available, manufacturers are making progress. Tesla’s recent announcement of plans to build semiautonomous trucks indicates additional change is on the way for the freight and trucking industry.
Although the hours of service regulations are in effect, do those same regulations apply for truckers using semiautonomous vehicles? What about Amazon Air? Is Amazon really going to launch blimp-like fulfillment centers?
These are questions that will need to be answered in 2018, and shippers can brace themselves by knowing what to expect in the interim.