On July 27, 2015, the American Trucking Associations released the U.S. Freight Transportation Forecast to 2026. This report, available for purchase here, poised some significant implications for the shipping, and by direct correlation, the logistics industry. With this information in-tow, shippers need to start planning for how to deal with the projected increase. Take a look at some of the specifics of the Freight Forecast and how shippers may adapt to the coming increases.
Vitals of the Freight Forecast
Some of the highlights of the Freight Forecast include a dramatic increase of 28.6 percent in freight volume within the next 11 years. US trucking freight will experience a slight decrease in total market share from 68.4 percent to 64.6 percent by 2026. However, US trucking freight will continue to reign as the predominant mode of transport into the future. Part of the significant freight increases derive from associated transportation costs through increased use of pipelines, which will increase 10.6 percent per year to a final market share of 18.1 percent in 2016.
Now, you may be wondering how this will affect the overall revenue of the freight and shipping industry. Freight revenue is projected to increase by 74.5 percent in this 11-year time period. This represents a rise to all-time high revenue of $1.52 trillion. To really understand the scope of this amount of money, the US National Debt is approximately $18.3 trillion as of 9:00 PM CST on July 30, 2015. This means the increased revenue by 2026 would amount to more than five percent of the total current US National Debt.
The other consideration and factor within the Freight Forecast focuses on the physical trucking aspects of shipping. According to the Freight Forecast, shippers will need to increase their existing Class 8 truck fleet from 3.56 million trucks to 3.98 million by 2026. According to the NADA Used Car Guide, the average retail price for Class 8 trucks with 999,999 miles or fewer stood at approximately $56,000. If this were the average cost of a truck for the projected increase, it represents the need to spend an additional $23.52 million on more trucks alone. Now, this doesn’t take into account that new trucks will have retail values in excess of the $56,000, especially as inflation continues to rise.
The sheer amount of data from the Freight Forecast and its subsequent data analysis, such as the above-mentioned trucking expenses, give rise to anxiety over how shippers will meet this growing demand. We have already discussed the capacity crunch and the driver shortage in-depth in other posts, but seeing such a dramatic rise in overall freight capacity within the next 11 years means today’s capacity crunch cannot compare to the forthcoming crunch. So, the only viable solution to preparing for the expected increases in freight transportation rests with streamlining our existing shipping processes and making things run as smoothly as possible. Shippers need to follow these tips without exception.
Keep Drivers Happy.
This sounds silly, but upset drivers translate into delayed shipments, the worsening of the driver shortage, and an inability to meet consumer demands. Keeping drivers happy actually is the result of the next several tips.
Maintain Flexible Docking Times.
What gets more annoying than waiting in the car for the family to get loaded? Nothing. This same principle applies to drivers. Drivers need to be able to arrive, pickup their hauls quickly, and depart without problem. Having strict rules and dwell times is comparable to waiting on the family to leave. Drivers can’t embark on their own without their cargo, but it makes for a stressful journey.
Keep Things Organized.
Keeping things in their place, such as freight ready before trucks arrive, keeping the lot empty, and monitoring the arrival and departure of trucks, is essential to meeting the demand of the future’s projected increase in freight.
Automate What Can Be Automated.
Some have fought to avoid replacing a person with pen and paper with a computerized tracking, rating, and booking system, such as the TMS of Cerasis, but today’s shipping industry is improbably, if not downright impossible, to track in old-fashioned methods. Any process that can be automated needs to be moved into the hands of advanced computer systems immediately. Furthermore, data analytics can provide specific ways to enhance the overall productivity and efficiency of the shipping industry.
Plan For Consistency, and Consistently Plan.
Some shippers continue to request shipments at the end of calendar months. However, this is not going to be feasible in both today’s and the future’s era of shipping. Furthermore, shippers will tend to steady, reliable, and consistent clients first, before working on sporadic shipments. As a result, retailers and shippers alike must work together to create a consistent plan, which must adapt constantly and be monitored at all times. Planning a month’s shipments may sound like an easy task, but a single natural, or man-made, disaster could result in the ruin of last-minute shipments, if not cause problems for well-planned, month-long shipments. Therefore, all parties in the shipping world must remain vigilant for any changes in their plans before they transpire into a disastrous hodge-podge of angry drivers, irate consumers, and endless demands for financial remuneration.
The Freight Forecast should not invoke fear and panic, but it should invoke the need to prepare for the future. With unprecedented increases in freight and significant costs and changes to the industry, the logistics world of 2026 must be a paragon of efficiency, reliability, and consistency. It’s rare to gain a peek into the future, and such glimpses of future existence demand action. Do not let this report result in your demise.