The freight industry of today is evolving rapidly. It is no longer bound by the traditional constraints of the economy, and Amazon is gearing up to begin expanding to be the best of the global freight shipping providers. As a result, your company needs to think about these freight shipping trends and how you can prepare to respond to them as soon as possible.
8 Freight Shipping Trends Shippers Must Know for 2017
1. Freight Shipping Providers Will Focus on ELD Implementation.
With the official deadline for implementing electronic logging devices less than one year away, more freight shipping providers will be upgrading technology and systems in 2017, reports Matt Sullivan. This will help to ensure maximum compliance once the deadline passes, but additional mandates will continue to push the industry forward.
2. Hours of Service Will Become Core to Freight Operations.
Meeting the hours-of-service (HOS) requirements for drivers will be a key concern among freight shipping providers this year. In the past, drivers were subject to fewer restrictions on mandatory breaks and time off the road. However, the newer HOS statutes mean that fewer drivers will be available at any given time to get shipments from point A to point B. Consequently, the driver shortage may grow worse with this new perception.
3. Capacity Demand Will Grow in Importance.
Capacity is expected to grow tighter and more important in the coming year. In the latter half of 2016, freight demand increased each month consecutively, asserts Mark Montague of Supply Chain Brief. Furthermore, less-than-truckload (LTL) shipments increased faster than full truckload (FT). This trend will be driven more as the year progresses as drivers retire and the driver shortage gains momentum.
4. Freight Rates Will Increase.
The factors will contribute to an increase in freight rates as well. Reduced capacity and increased demand will also weigh heavily on the industry, but the biggest impact will be felt in fall 2017, following the ELD mandate. But, a few other influences will still affect the industry.
5. Optimism Behind the New Administration Will Spur Freight Growth.
The pro-business stance of the new administration, reports Sean Kicarr of FleetOwner, will act as a stimulus among freight shipping providers. This will help to encourage enhanced, increased hiring practices, provide an acceptable tax code to businesses of varying sizes and encourage reshoring practices. In other words, more manufacturing jobs will return to the U.S., which will place added pressure on freight shippers to hire more drivers and invest in a fleet. Ultimately, the new administration is poised to increase freight spend and accountability over 2017 and beyond.
6. Ocean Freight Will Feel the Amazon Impact.
Amazon recently entered the global, ocean shipping market as global shipping competitors were unable to keep up with the online retailer’s surging demand for faster, cheaper freight shipping. Amazon now has its non-vessel-owning common carrier (NVOCC) license, which will allow the company to operate in shipping international containers. Moreover, Amazon also has developed its dedicated aircrafts for faster global and regional delivery. In other words, the company is using investments into its freight shipping processes to meet the demand where carriers and local shippers cannot.
6. Dynamic Pricing Will Become Commonplace.
The use of Application Program Interfaces (APIs) will give freight shipping providers an advantage in keeping rates lower. Moreover, APIs will automate all data exchanges between carriers, shippers, freight brokers, receivers, and transportation management systems (TMS), making the process of rate adjustments and selection easier across the board, reports FleetOwner.
7. Automation Will Enhance Freight Visibility and Accountability.
Robotics, virtual reality and automated picking and packaging processes will reduce labor and transportation costs for the industry. Of course, automation begets automation. In other words, the Industrial Internet of Things (IIoT) will be required to enable automation, which will result in better visibility and accountability across an organization. Furthermore, companies will be able to respond to problematic weather conditions, cyber security threats and disruptions in communication faster through the IIoT and automated systems. Additionally, autonomous trucks (self-driving trucks) will also reduce the labor demand while increasing demand on the IIoT.
8. Freight Shipping Providers May Respond Faster to Educational Concerns Than Politicians.
The next wave of freight workers will need to have an intricate understanding of mathematics, computer programming and robotics to be effective. However, the current political climate continues to push an agenda based on college degrees as a source of education. Unfortunately, the increasing focus on domestic spending by the U.S. government is starting to have an impact on student loan programs and grants.
Consequently, more Americans are hitting roadblocks to attaining an education with the skills necessary to enter the increasingly automated, advanced freight industry. So, more companies will begin offering tuition reimbursement programs or educational programs to encourage potential applicants to work for their company. While this represents an increased hiring cost, it will help employees gain a sense of loyalty and drive labor longevity in the industry.
The Big Picture.
Freight is growing. It’s getting smarter, faster and more responsive to the demands of the market. With the promise of reshoring hope and possible public backlash for continuing offshoring of processes, freight shipping providers will have the opportunity to restore public trust and increase profits in 2017. They just need to take notice of what’s happening with freight shipping trends.