A Guest Post Megan Ray Nichols
The transportation and logistics industries keep the country moving, quite literally. Modern commerce would be impossible to maintain without the truckers who haul freight from coast to coast. The industry has changed dramatically in the last few decades as needs have shifted and technology has advanced. What transportation trends are currently shaping the industry, and how can we expect to see them applied in the future?
Projected Tonnage Increase in the Next Decade
The transportation industry delivers the country’s freight on time, and the demand for that service will continue to grow dramatically into the future. According to an August press release from the American Trucking Association, truckers can expect to see their freight tonnage increase by 25.6% by 2030. “Freight-industry revenues will increase 53.8% to $1.601 trillion over the next decade,” said the ATA, “and overall freight tonnage will grow to 20.6 billion tons in 2030.”
This increase in projected freight tonnage will shape the industry in likely unexpected ways.
Current and Future Labor Shortages
In spite of the massive freight tonnage increase projected in the next decade, the transportation industry is facing a looming labor shortage of epic proportions. In the next 20 years, more than half of current freight drivers will reach retirement age, and with current hiring trends and the reluctance of younger generations to seek a career in a challenging field like trucking, there aren’t enough new drivers to replace them. Currently, 10,000 baby boomers reach retirement age every day.
The transportation industry will need to change if it hopes to continue to thrive in the future. This labor shortage trend will continue as long as transportation companies continue to focus on maintaining the status quo. Millennials currently represent the largest section of working adults, and most refuse to seek out a career in trucking because it doesn’t offer the kind of healthy work/life balance they’re looking for. Transportation companies will need to start offering better benefits, better pay and more flexible schedules — among other things — to entice millennials to join their ranks and prevent this labor shortage from forcing companies to embrace other emerging trends.
Push Toward Electric Vehicles
While fuel isn’t as expensive as it was back in 2008, rising fuel costs are still impacting the transportation industry. A global mandate that requires cargo vessels to burn cleaner fuel will impact the price of diesel even further going into 2020, which may lead many companies to turn to alternatives — specifically, electric vehicles. Tesla announced in 2018 that they had electric trucks available for pre-order, and many freight giants like FedEx jumped at the opportunity. “Since 2008, FedEx has saved more than 158 million gallons of fuel by replacing vehicles with more efficient models and making greater use of electric vehicles, fuel cells, natural gas, hybrids and clean truck technologies,” said FedEx in their March 2018 press release.
Ideally, these electric trucks will cost between $150,000 and $180,000 and, according to Tesla CEO Elon Musk, provide the owner with more than $200,000 in fuel savings. Companies are continuing to push toward electric vehicles to combat the rising cost of diesel.
Incorporating Data Technology
Data technology is part of our daily lives. We carry computers in our pockets that have more processing power than the ones that took humans to the moon during the Apollo missions. Robotic process automation, artificial intelligence, and big data will all start to change the trucking industry as more companies adopt this technology. AI and big data, for example, will be able to process information and make decisions faster than a human worker, and some companies are already starting to adopt it as part of their processes. In the next decade, the cost of running a logistics and transportation company could drop by as much as 5%, thanks to AI systems and decision-making.
New data technology will continue to change the transportation industry, and it’s up to company owners to keep up with the changes to ensure they don’t get left behind.
The Future of the Transportation Industry
The transportation industry is in a state of flux and will continue to change as these trends work to push it forward. Labor shortages and increases in freight tonnage will be at odds with one another, and the remainder of these trends will serve to carry the trucking and logistics sectors into the future.