The freight industry has witnessed an incredible change in recent years. With a new decade here, it is hard to believe that the sector will not evolve even more, whether it is modifying its business model or adopting the latest technologies. The freight industry will have no other choice to adapt to changing market conditions and the industrial landscape. Otherwise, the sector will see a dwindling bottom line.
It is hard to succeed in the freight, shipping, transportation, and logistics industries. Businesses and consumers are buying, selling, and investing around the clock, and the industry needs to adapt to this remarkable development in the global marketplace. The only way to be successful is to incorporate the newest technology into a business model, modify management practices, while streamlining their freight audit and payment processes.
What does the future have in store? Here are eight freight industry trends to watch for in 2020 – and beyond:
Trend #6: There may be a driver shortage in the freight industry.
A recent American Trucking Association study found that the freight industry is short of more than 60,000 drivers. It is projected that this figure could double over the next decade due to three primary factors: the aging driver population, a paucity of new entrants in the industry, and government regulations.
The report recommended three solutions: enhance the hiring process, boost employee training, and encourage the government to support the industry.
Trend #2: The freight industry is becoming more automated.
Two things will eventually happen in the freight industry: Truckers will be replaced by self-driving trucks or automation will complement truckers. It is hard to conceive that, no matter how good the technology is, that companies will leave a huge inventory of goods in the hands of an autonomous vehicle. Everything from a dead battery to theft, there are many concerns that freight firms will have.
Trend #3: The freight industry will benefit from the Internet of Things (IoT).
The Internet of Things (IoT) is already beginning to play an important part in shipping and logistics. Today, trackers and beacons, sensors and monitors, and predictive instruments are used by the freight industry. But it turns out that supply chains will become even smarter in the following years.
Here is what you could see IoT in the freight industry currently, and the technologies are only about to get more sophisticated:
- Fleet management
- Inventory management
- Freight visibility
- Supply accountability
Trend #4: More mergers are coming in the freight industry.
The market conditions are ripe for a higher number of companies merging amid bankruptcies or a loss of revenues. Analysts warn that if other freight businesses are unable to move the needle and improve their finances, then mergers and acquisitions will be prevalent in the freight industry.
It should be noted that in addition to companies in the industry synergizing, it is expected that companies in other sectors will merge to expand their products and services.
Trend #5: Data science will help with the freight industry.
Let’s face it: big data, data science, and data analytics have seeped into every area of the economy. At a time when the freight industry needs a competitive advantage in the global market, businesses will inevitably adopt data analytics into their day-to-day operations.
Like IoT, data analytics can facilitate in understanding any hiccups in a business model and parts of the corporate infrastructure that might need to be improved upon. If they wish to make an overall impact, data science will need to be installed.
Trend #6: Electric vehicles are becoming popular in the freight industry.
Electric vehicles are still forecast to become a huge market in the coming years. With more manufacturers embracing EVs, freight companies will inevitably utilise the technology to save on energy costs.
While there might be some concerns about longevity, if one business takes advantage of electric and sees cost-savings and greater profitability, you will ultimately see more following suit.
Trend #7: There can be an increase in freight insurance costs.
This might be the most surprising finding, but experts are warning that liability insurance rates will continue to balloon and contribute to business insolvency. This prognostication was supported by 2019 data that highlighted a key element for business failures was “increased insurance costs.”
Hub International writes:
“Insurance claims related to truck crashes have increased in frequency and severity over the last several years, and premiums paid to the insurance carriers have not kept pace. This has resulted in a hardened truck insurance market – possibly the worst the industry has ever seen. Rate increases have affected even the most risk-conscious fleets.”
It could worsen if freight operators are raising their deductibles or experimenting with other risk products or services.
Trend #8: E-Cargo bikes are becoming more popular in urban centres.
To cut down on costs and reduce its carbon footprint, the freight industry is investing in e-cargo bikes in urban centres. A whole host of companies in this sector, like Amazon and UPS, are deploying an incredible number of e-cargo bikes to deliver their goods. What makes them attractive is that they reduce congestion, do not run on battery, and take advantage of the various bike lanes ubiquitous in big cities.
Essentially, what you could see this year and throughout the rest of the decade, is the freight adopting the Uber model.