Ground Transport: Peering into the Future of the Trucking Industry

The future of trucking is in sight. Call it the New Normal. Call it the Brave New World. Call it what you like. The trucking industry is transforming, and its future is on the horizon.

As you know, the trucking transformation did not begin in 2021. However, it will likely go down as the year transformational trends accelerated.

Trends shaping the trucking industry are infrastructure investment, eCommerce, technology, and sustainability. We discussed some of this in a prior blog post on opportunities in the industry.

Now, we’ll peer into the future to see how trucking will likely change.

 

Future Infrastructure Investment for Efficiency and Competitive Advantage

To no one’s surprise, Congress is still negotiating the infrastructure bill. But, in reading the tea leaves, it appears Congress might send a bill to the President before the summer break. Maybe.

Democrats are under growing pressure to get an infrastructure bill passed. So, there’s hope – but no guarantees.

At issue is the definition of infrastructure. Democrats want to expand the traditional definition to include housing, day care, education for a broader definition. Republicans, meanwhile, want to stick to the less expansive definition we’re all familiar with. That’s the standard definition that includes, roads, bridges, ports, water and power supplies.

Any bill “expansive” or “not-so-expansive” will be long-term in nature. It would have long-term effects shaping the industry’s future. That makes infrastructure investment a potential game changer.

Sticking to the standard, “not-so-expansive”, definition of infrastructure, the industry would see newer and improved roads, bridges, and ports. Improved infrastructure will assist more efficient transportation of goods. It will help reduce delays and wasted time for drivers on the road.

Also, improved traffic management, such as streetlights managed by “smart technologies” will help optimize flows and reduce waiting time. Technology can’t end traffic jams. But it can mitigate them.

Reliability will improve. That will result in improved on-time deliveries, safer road conditions and fewer accidents. That means improved traffic flows on urban roads, highways and at ports/terminals.

New and improved roads, bridges, airports, seaports, and railheads will likely boost efficiency. Higher efficiency should generate economic growth. That, in turn, should increase U.S. and private business competitive advantage. That’s a powerful incentive for infrastructure investment.

 

The Inevitable Rise of eCommerce

Two trends are shaping the rise of e-Commerce today. First, we have increased consumer demand caused by the lockdown. Next, we’re seeing a dramatic and enduring consumer shift to online purchasing.

Those two trends have popularized eCommerce, and they show no signs of waning.

Along with infrastructure improvements, we will likely see an expansion of urban distribution centers. We’re seeing that now. Last September, Prologis built a multi-story warehouse in Seattle, mainly for Amazon. Now, Prologis is building another multistory warehouse in New Your City. That will help improve shipping performance with expedited deliveries.

eCommerce will also attract new entrants to the less-than-truckload (LTL) market. You will see that with more new firms. You will also see big firms like Knight Transportation and DHL enter the market. Knight Transportation just bought out AAA Cooper, an LTL carrier in Alabama on July 5, 2021.(JOC.com)

Another change is the use of crowdsourced delivery. Amazon Flex, Uber and Postmates have already entered this space. This will ease the pressure on the existing driver shortage and capacity availability. Crowd sourced delivery is growing quickly as more companies continue to enter this space.

As shipping volume increases over time, we will see the LTL sector grow. But it will grow in an efficient, effective, and sustainable way. (More on sustainability below.)

 

The Rapid Adoption of Emerging Technologies

The trucking industry will profit by the rise of AI, Robotics, End-to-End visibility, and Big Data and Analytics. Technology won’t replace drivers entirely. But it may ease the persistent driver shortage, as technology matures.

Also, AI will help with improving on-time delivery through “sense and respond” technologies.

That will enable drivers to avoid traffic jams and accidents. Real-time data will be a boon to trucking by promoting agility and resilience. All in all, “sense-and-respond” technologies will introduce must-have flexibility into ground transportation.

But some argue emerging technologies also have an Achilles heel. That is, emerging tech will cut jobs. That’s true, but it will also create new jobs.

For example, AVs will, need assistant drivers to enable manual overrides to avoid accidents. Also, technology will create a demand for software technicians who can fix glitches on-the-spot as needed. So, emerging technologies may eliminate some jobs, but it will also create others.

Besides that, new technologies will lead to more interesting and meaningful jobs. The adoption of technologies, like telematics, will change the nature of driving. That will create a demand for more highly skilled workers.

Technology will also flatten organizations empowering workers while keeping everyone in the enterprise informed. More specifically, technology will drive decisions down to where they should be made. We will witness the empowerment of staff as well as drivers with greater decision-making responsibilities.

New duties and responsibilities and new organizational models require a more sophisticated workforce. Driver shortages should decline as their jobs become more meaningful. And that should improve efficiency and effectiveness.

 

The Global Movement Towards Eco-friendly Sustainability

The trucking industry is not alone in shifting towards “Greener” operations. The Green movement has become a global mandate. That said, trucking companies in the U.S. are embracing that trend from many avenues.

In the future we’ll see more fuel-efficient trucks and more aerodynamically designed trucks.

Improved design will reduce drag and improve efficiency. That will contribute to lowered carbon emissions, improved distribution, and reduced customer wait times.

All in all, sustainability will not only enhance environmental conditions. It will also enhance daily as well as strategic operations. Trucking companies should see increased profits and reduced costs as they enjoy the benefits of optimized networks, better fuel economy, safer trucks, and improved road conditions.

 

The Future of Trucking is Happening Now…

Transformation in the trucking industry is happening now. Of course, it has been in the works, but initiatives have accelerated since the pandemic.

Trucking is adapting and adjusting to those pandemic-induced changes. The industry isn’t standing still. Instead, it is transforming by innovating and developing creative solutions.

As the trucking industry transforms, American Global Logistics is carefully tracking these trends. We’re tracking infrastructure investment, e-Commerce, technology, and sustainability so you don’t have to.

A lot is at stake as the industry recovers from the pandemic. Not sure what to do next?

Contact us today to schedule an appointment and take charge of the future. We’d love to discuss your challenges and your opportunities.