The freight transportation industry is at the mercy of current trends, much like all other industries. Unique to freight transportation are the trends that drive prices up or down. Everything from labor shortages to general rate fluctuations can cause a shift in pricing. The key for all shippers and transportation companies is to stay ahead of the curve. Staying a step ahead will help maximize the influx of revenue or mitigate devastating pricing cuts. Here are a few of the current transportation trends influencing industry pricing.
As demand continues to increase, the need for highly qualified drivers does as well. The problem facing many companies is that a large chunk of drivers are reaching retirement age. On top of that, new drivers coming in from younger generations are not filing in as quickly. Labor shortages require businesses to increase wages to entice qualified drivers. These wage increases are often evened out by raising shipping rates to meet budget and profitability constraints.
Trends around data collection are not new to any industry. Big Data is helping shape decisions all over the globe. In transportation, companies are using the information to make better business decisions and optimize supply chains. Data collection and analysis also helps shippers determine optimum freight loads. Efficiency is the goal of data analysis and efficiency leads to reduction in cost.
Rates are trending to increase for truckloads due to a shift in business models. Many companies are focusing on their core functions and outsourcing the rest. More often than not, shipping is the first to be outsourced. As demand increases, rates will increase. This is great news for drivers as there should be more work available to them at a reasonable price.
The biggest trend that is a real threat to business, is the upswing of disruptors. New companies are popping up that are trying their best to make processes easier for customers, all the while, disrupting longstanding business models that haven’t kept up. They new companies and ideas are innovative, but pose a real threat to the bottom line of those not ready to invest and move forward.
The best way to prepare for disruption is to become a disruptor yourself. Companies need to rethink what they are doing and implement new practices that focus on technology and the customer. If you stay a step ahead of the disruptors, you automatically become the leader and innovator.