Being informed creates opportunity. 5 Trends in Shipping and Transportation covers what’s happening now and what lies ahead for this sector.
Even in a digital age, physical freight remains the lifeblood of the U.S. economy. Today, the transportation industry is going strong, but as it adjusts to new realities, our latest report outlines five trends to watch that represent both a challenge and an opportunity.
#1: LABOR SHORTAGES
Low unemployment is good news for American workers, but is creating problems for transportation companies looking to hire employees they need. Logistics companies face challenges filling warehouse jobs as workers choose jobs across many fields, while trucking companies are finding it hard to attract and retain drivers. The answer may lie in automation, as well as improved pay and benefits.
#2: INNOVATION AND TECHNOLOGY
Rapid delivery of consumer goods ordered online has become a benchmark that shippers and consumers alike expect. For transportation companies, that means adhering to ever-more-stringent “must arrive by” requirements. In trucking, technology is helping increase operational efficiencies, while logistics companies are developing transportation management systems.
Consolidation has been a major theme in the airline industry for years. Facing fewer competitors, airlines have been able to manage capacity and ticket pricing, fly fuller planes and improve profitability. In contrast, trucking, long dominated by regional rather than national carriers, has seen dozens of mergers and acquisitions in recent years.4 The fragmented field of ocean shipping could also be subject to further consolidation, as could logistics, reflecting its rising importance in an age of e-commerce.
#4. A GREENER INDUSTRY
Transportation accounts for over 28% of total U.S. greenhouse gas emissions, the largest of any industry.5 Domestic and international regulation aims to lower emissions, resulting in a search for alternatives like electric vehicles and cleaner fuels. Companies that reduce their environmental impact have the opportunity to not only cut costs, but also appeal to investors concerned with environmental, social and governance practices.
#5: THE TRADE WAR AND OTHER DISRUPTIONS
Few industries are more challenged by external disruptions than transportation, which is subject to everything from the ongoing U.S. - China trade war to weather to fluctuations in fuel prices and labor disputes. Added to this is an aging U.S. infrastructure and overcrowded roads. With public funding lagging, there could be a gradual shift to private investors, who appear ready to leap in when the opportunity presents itself.
- Economic growth poses a unique set of challenges for shipping and transportation companies
- Technology and innovation are helping to improve inventory management, labor shortages and operational efficiencies
- The industry is becoming greener, pushed by climate change regulation and the growth of impact investing