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Five Remarkable Trends and Insights in Trucking

by Charlotte Freed | Oct 12, 2018

Trucks racing for the future John Larkin spoke at the McLeod Software Users Conference in Birmingham, AL where he deliberated the trends he has observed in the freight transportation industry. A longtime transportation research analyst and investment banker, Larkin reviewed the transformation of freight from when he was a child to current operations due to big box stores and the insurgence of e-commerce. From 3-D printing to evolving customer demand, the changes are dramatic and he foresees continued change ahead, noting several key transformations.

It’s a Good Time for Truckload

The largest sector of transportation, truckload’s demand maintains growth, and capacity is tight. The driver shortage paired with loss of productivity due to the ELD mandate has prompted small fleets to emerge with some of them growing rapidly, benefitting from the recent stagnant used truck market.

LTL Making a Comeback

With smaller-footprint urban fulfillment centers popping up from higher demand due to e-commerce popularity, LTL or partial truckloads to an LTL carrier are gaining market share. With a business model profiting from density, LTL also benefits from labor availability better than in truckload. Access for younger workers and a clearer career path make LTL more of an attractive route for new hires, but there is still a struggle to find workers in the sector. Larkin expects to see predictive analytics and APIs driving dynamic pricing in LTL and that “big players should do extremely well.”

It’s a Good Time for Warehousing

E-commerce is causing the warehouse sector to skyrocket, with warehouse space outpricing office space in some cities. The customer demands of instantaneous service and delivery require product to be available in urban areas where real estate is more costly. Not only is it more expensive to lease existing space in urban areas but also a much more in-depth, regulated process to build new warehousing. More warehousing and distribution centers are automating operations due to their own labor shortage; Larkin expects he’ll see autonomy more in warehouses before he sees them on highways.

Last Mile Delivery is Ready for Takers

Who will benefit from last mile delivery opportunity is yet to be known, Larkin says. With Europe testing rolling delivery robots, UPS investigating drone delivery, and crowdsourcing companies like Lyft and Uber making moves in the last mile space – it is yet to be seen who will end up owning this share of the market.

Shipping Gets a Boost from Technology

Accelerations in technology have resulted in a number of internally and venture-capital funded shipment tracking apps, following the load from warehouse to truck to plane. The information gained through this technology will serve to compile data analytics and AI that will help with predictions, ultimately allowing increased planning and optimization. Larkin foresees the positive impact blockchain will make in the industry by creating a unified foundation to establish standards and protocols that will help everyone in the supply chain to work efficiently and accurately.

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