With growing competition in the transportation sector, involved companies should deploy new existing technologies and extensively improve the quality of their services to remain in the business. What are the upcoming winning strategies that will lead the whole logistics industry?
Shipping goods is a significant part of the economy in each country. According to Statista, truck transportation contributed more than $150 billion to the US nation’s gross domestic product in 2016. Solely FedEx, the leading freight transportation company, generated over $60 million of revenue in the same year. Logistics companies are mostly focused on servicing an E-commerce market. Fred Smith, a founder of FedEx, forecasted this market to reach the value of nearly $2.4 trillion by 2018 with its 26% growth compared to 2016.
The key to the success in the transportation business is offering the most cost-effective, flexible, and efficient services. That’s why shipping companies should turn towards modern strategies and trends in the transportation industry to compete with market players.
Trend #1: Safer Roads with Electronic Devices for Drivers
Electronic Log Devices (ELDs) may have a significant impact on the transportation industry in 2018. Aimed at holding drivers to the maximum fifty hours of service (HOS) per week, with two days off, these devices can make roads safer by encouraging drivers to rest enough. Although, carriers may no longer ship as much cargo as they used to with ELDs. Furthermore, the cost of these devices will be included in the price of services. By April 2018, transportation companies that haul loads by trucks have to implement ELDs.
Read more about Elimination of human factor in transportation.
Trend #2: Self-Driving Trucks
The technology for self-driving trucks is still under perfecting and it has to overcome certain obstacles, such as improving driverless software to make it able to efficiently operate on city roads with heavy traffic. However, it’s one of the future trends in transportation. In the long-term perspective, transportation businesses should begin to prepare for upcoming technology changes within the industry and start equipping their trucks with self-navigating systems that can «learn» from real drivers.
Due to artificial intelligence (AI) and myriad sensors, an AI-enabled vehicle can correctly evaluate road conditions and learn from how truck drivers behave under «unusual» conditions on the road. Furthermore, through vehicle-to-vehicle (V2V) communication, trucks can share the learned information and make other vehicles smarter. In the long-term perspective, these vehicles can potentially become better drivers than human operators.
In fact, this future is even closer than it can seem. Tesla’s electric Semi truck have autopilot features which can greatly facilitate the driving process. Walmart, along with many other companies, such as Pepsi, Asko, and Loblaw confirmed having ordered Tesla Semi trucks for their commercial needs.
Trend #3: Regulation Compliance
It will be more correct to say that the regulation compliance is a must rather than one of the latest trends in transportation. Commercial transport companies should stay up-to-date on recent requirements and regulations adopted, changed, or removed by any local, state, or federal governing bodies. Whether it’s regulations regarding electronic logbooks, overtime, or safety rules, timely monitoring regulations will always be a trend.
Trend #4: Blockchain in Logistics
Blockchain becomes one of the new trends in transportation. One of the perspective use cases for the blockchain technology in trucking is ensuring the accuracy of performance history records. When a truck gets sold for the second time, potential customers may have questions about how this vehicle was used. Since blockchain transactions are immutable and transparent, all parties involved in a transaction can be sure that the information about the truck is trustworthy.
Another perspective use of blockchain in transportation is capacity monitoring. The cost of transportation depends on the cargo volume. The use of Internet-of-things (IoT) sensors can help determine the amount of space a particular cargo occupies. This data can be used to calculate the shipment cost. Storing this information into a blockchain-based system signed with a smart contract will allow self-executing payments on a base of the amount of space taken by the freight.
Trend #5: Address Delivery
The growth of E-commerce businesses leads to a rising demand for address deliveries. Providing a better service means being more competitive. Heavy trucking businesses should consider adding a fleet of small vehicles to conquer a bigger piece of the market. However, last mile deliveries lead to tight shipping schedules or even additional supply chain risks. One way or another, an address delivery is one of the transportation and logistics industry trends of 2018.
Trend #6: Spreading Low-Cost Airlines
Low-cost airlines have conquered significant market shares and have an important impact on air shipping pricing, particularly in Europe and North America. They have differentiated service levels that are enough for various clients to allow them pay only for a minimum set of services. Low-cost airlines expand aggressively while demping prices to keep their planes full. Some of them focus on both national and international flights. Their low pricing is mostly related to low labor costs in those countries they work in and smaller portion of fuel needed to overcome particular distances. That’s why transportation companies should strive to increase the efficiency of their services.
Trend #7: Drone Delivery
Within a last mile delivery focus tendency among both retailers and transportation companies, some companies test delivering packages by a drone. In the end of 2016, Amazon first delivered an order to its customer using a drone. This delivery was conducted in England within Amazon’s new program called Prime Air which implied that a customer could get a package in 30 minutes. After Amazon’s success, various companies started investing in a drone delivery to increase the cost-effectiveness of their business. Taking into account the opportunities of such approach, delivering packages by a drone will be among main transportation market trends of 2018.
With the increase of expenses of transportation companies (on fuel, auto parts, etc.) transportation companies should apply new methods and strategies to improve their efficiency and mobility. For the same purpose, they should look ahead and be ready to invest in equipping their fleet with smart devices and deploying modern technologies that facilitate deliveries.
Stfalcon has been working with transportation companies for about ten years and we have developed numerous web applications for both cargo and passenger transportation businesses. We know how to make your deliveries more efficient and cost-effective. Drop us a line at email@example.com to learn more.