5 Factors Impacting Freight Transportation Today
Freight Transportation
The transportation industry is a dynamic, competitive one and the fate of business owners connected to it is at the mercy of a myriad of external factors. Government influencers, the state of the economy and simply the changing times all contribute to the success of one vast intersecting supply chain that encompasses logistics, freight rail, trucking, air and sea delivery. So how can you prepare for these disrupting factors? Acknowledge them and keep up with new advances by making investments in strategic ways.
Here’s five factors that have a big impact on freight transportation today:
Economy
The weight of the United States economy on transportation is a given. Currently, the manufacturing sector appears to be still in 2023’s manufacturing recession. The truckload market capacity remains loose for the truckload (TL) industry, however capacity is already relatively tight for the less than truckload (LTL) industry.
Infrastructure
In 2015, infrastructure cost the transportation industry $64.4 billion due to traffic congestion. This cost can then be seen for all of us in the industry in the form of higher prices for our products. Infrastructure has been an ongoing issue in America for decades, but there’s never been agreement on a fix. Hopefully the years ahead will see an increase in funding.
Regulations
New transportation and safety regulations continually impact the transportation industry. Electronic logging device (ELD) mandates had an impact on capacity in 2017. The hours of service compliance keeps our roads safe, however it also reduces drivers time behind the wheel resulting in less capacity.
Technology
Technology is a constant disruptor in the industry, but right now artificial intelligence and transportation management systems (TMS) exist that are helping manufacturers and distributors become more efficient at their jobs. In the near future, tried and tested semi-autonomous vehicles could lead to safer driving and easier training while improving delivery times for new drivers. Of course, fully autonomous vehicles will change the industry entirely.
Fuel Surcharge
Fuel in America does appear to be under control for now and will most likely continue to stay under control thanks to the balance between the Organization of the Petroleum Exporting Countries (OPEC) and a drop in demand. But this is always a major factor in the success of businesses connected to freight transportation.
Are you prepared for the future of freight? Smart transportation professionals keep these five factors in mind to consider the repercussions on their supply chains.
If you’re beginning the search for a logistics solutions provider to manage your freight the smart way, make sure that your 3PL is checking all the boxes!
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