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The 3 Forces Sculpting Logistics In The Transportation Industry

By on December 11, 2018

Distribution of products through logistics, supply chains, and transportation networks is vital to a company’s success. (Logically; if you can’t get your goods to customers, your business isn’t going to last very long). While many industries can relax safe and comfortable in their old habits and ways of doing things, logistics is considered, according to 65% of senior transportation-focused executives, to be in an era of “profound transformation.” If the world is shifting around you, you cannot be static or your company will collapse; you must change with it, and in the direction that it’s headed. Those changes are caused by these three major players.

 

  • Shifting economic and industry fundamentals: Lower U.S. taxes (and other related reforms) are increasing demand. Combined with consumer confidence and a resurgence in manufacturing, the end result is more carrier and heavy haul vehicles that push warehousing and distribution companies to capacity. The shortage of drivers has an impact as well, so staying on top of industry shifts is key to maintaining your edge, especially considering the fact that around 80% of all U.S. exports to Canada are moved by truck.

 

  • The rise of the “Amazon” effect: Amazon’s commitment to extremely fast delivery is altering people’s expectations, and radically so. Consumers now want deliveries at their door within a day or two, with plenty of notifications revealing where it is and what steps it has gone through. This demand forces businesses to build warehouses closer to customers, and simply build more of them to maintain their reach.

 

  • Advances in technology: The driver shortage may have found a solution thanks to technology as groups like Tesla, Waymo, Starsky Robotics, and Embark have already begun testing long-haul robotic trucks. The aerial drone, which Amazon has been hinting at for years, could also have a huge impact in speeding up the logistics process. While we may be several years (even decades) out from either, it’s important to be aware of new developments.

Creating a reliable and popular product is hard enough, but when you take in distribution, storage, and the supply chain of your entire system, running a business can easily become overwhelming. As long as you’re able to keep an eye on this rapidly transforming industry and prepare for whatever may be coming down the pike.

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