Continued Shifts in the Transportation Industry

  • October 4, 2017 /
  • by Andrew /
  • state of the trucking industry, trucking regulatory compliance, trucking risk /
  • Leave a comment

The transportation industry is currently undergoing massive changes. One of the biggest challenges facing the industry is the accelerated pace of e-commerce sales. E-commerce transactions are exerting a major effect on freight patterns across the country. As much as 10 percent of retail transactions occur online, which spells disaster for traditional brick and mortar stores. Experts expect upwards of 20 percent of retail stores will close within the next decade due to growing e-commerce sales.

Parcel Carriers Going Strong

UPS, USPS, and FedEx gained the most financially from the e-commerce boom. Between 2011 and 2016, the parcel business saw a 5.4% increase in their compound annual growth rate (CAGR). Less than load (LTL) carriers only netted a 2.6% bump and truckload (TL) carriers experienced a paltry 0.6% increase.

However, with each new challenge, truck drivers also have new opportunities. The biggest change to freight patterns is the shipment of finished goods. TL shipments are transitioning to multi-stop loads including delivering to personal residences. LTL carriers used to control this market, but this shift in freight patterns represents an opening for TL carriers to enter it.

TL Carriers Behind the ELD Curve

There is one major roadblock for TL carriers to seize new opportunities within the industry. Many of them are not yet compliant with the Federal Motor Carrier Safety Administration’s (FMCSA) electronic logging device (ELD) mandate. As much as 20% of the TL division is noncompliant. These carriers will face a steep learning curve and experience productivity disruptions. In fact, these interruptions may force some smaller fleets to shut down their businesses.

In this instance, fortune favors the prepared. Those who are already ELD-compliant will be able to pick up business that the unprepared cannot. Envirun can help bring non-compliant fleets up to speed on ELD implementation as well as help compliant fleets transition into the expanding e-commerce market. To learn more, contact us.