The transportation industry is a dynamic, competitive one and the fate of business owners connected to it is at the mercy of a myriad of external factors. Government influencers, the state of the economy and simply the changing times all contribute to the success of one vast intersecting supply chain that encompasses logistics, freight rail, trucking, air and sea delivery. So how can you prepare for these disrupting factors? Acknowledge them and keep up with new advances by making investments in strategic ways. Here’s five factors that have a big impact on freight transportation today.
The weight of the United States economy on transportation is a given. Currently, the manufacturing sector appears to be rising out of the dust of 2016’s manufacturing recession. This will result in tighter capacity for the truckload (TL) industry, as capacity is already relatively tight for the less than truckload (LTL) industry.
In 2015, infrastructure cost the transportation industry $64.4 billion due to traffic congestion. This cost can then be seen for all of us in the industry in the form of higher prices for our products. Infrastructure has been an ongoing issue in America for decades, but there’s never been agreement on a fix. Hopefully the years ahead will see an increase in funding.
New transportation and safety regulations continually impact the transportation industry. Electronic logging device (ELD) mandates might carry the greatest impact by the end of 2017. This regulation could affect capacity by as much as 5%, although no funds are budgeted to enforce them and carriers will see an additional 2-year reprieve if they currently use an older ELD that doesn’t meet the new requirements.
Technology is a constant disruptor in the industry, but right now smart phone applications and transportation management systems (TMS) exist that are helping manufacturers and distributors become more efficient at their jobs. In the near future, tried and tested semi-autonomous vehicles could lead to safer driving and easier training while improving delivery times for new drivers. Of course, fully autonomous vehicles will change the industry entirely.
Fuel in America does appear to be under control for now and will most likely continue to stay under control thanks to the balance between the Organization of the Petroleum Exporting Countries (OPEC) and fracking. But this is always a major factor in the success of businesses connected to freight transportation.
Are you prepared for the future of freight? Smart transportation professionals keep these five factors in mind to consider the repercussions on their supply chains.