North American Freight Trends In 2019

  • More Complex Distribution Landscape

Ecommerce and an immersive customer relationship approach is increasing the need for a diversified distribution landscape with omni-channel capabilities. No longer do distribution center’s operate solely on a pallet in, pallet out basis. The increase in eCommerce fulfillment and omni-channel customer support require an increase in local warehousing and shorter freight channels from DC site to site. This means that freight will be in shorter transit and will include a more diversified inventory of full pallets, cases and each picking to fulfill increasingly complex SKU count at more distribution locations.

The complexity of distribution to address ecommerce and home delivery means supply chain streamlining is more important than ever. Good relationships with 3PL providers or a diverse warehouse configuration are necessary to be as flexible as possible and to carry larger, more diverse SKU counts.

  • Aging Driver Demographic

According to the American Trucking Association, the U.S. Economy requires around 3.5 million truck drivers to handle 10.5 billion tons of freight annually. The average age of truck drivers in the U.S. (above 55) means that there is a shortage of truck drivers and a huge demand for younger demographics to take up truck driving as a career.

A shortage of drivers is estimated to be around 50,000 and with increasing eCommerce and next day delivery logistics, there are plenty of amazing opportunities for younger demographics to consider. Around 70% of freight is transported with trucks on U.S. highways, meaning truck drivers will always be in high demand to meet distribution needs.

  • Rising Fuel Costs

Fuel cost fluctuations have always been a huge consideration for truck drivers in the U.S. and now it is more important than ever. Crude oil reserves and fuel consumption trends will continue to increase in 2019 but with more localized distribution centers and more fuel-efficient technology, the industry should balance out.

Rising fuel costs will push the rush for automated features in transportation such as automated route monitoring and ultimately will lead to fully automated trucking applications. These automated features will maximize route efficiency while minimizing transportation risk. Rising fuel costs increases the need for intermodal freight options such as trains where the technology and established rail network can be a more beneficial option to trucking on U.S. highways.

  • Warehouse Expansion

Ecommerce and order flexibility is increasing the need for multiple distribution centers under one umbrella and a shift from pallet to case and each picking solutions to meet larger customer demand. A customized consumer experience means a need for more flexible distribution and increased warehouse space to hold more and more SKU profiles. There are over 17,000 warehouses in the U.S. and fewer than 10% were built in the last decade according to a report by CBRE, which means a need for new ways to utilize the cubic space of established distribution sites. This means freight must adapt to the need for more diverse SKU counts and shorter routes for drivers between warehouses in an omni-channel landscape.

Warehouses are not going anywhere meaning freight channels will remain relatively similar to the current environment. Shorter routes and better technology / communication between facilities means less time on the road and greater capacity for meeting market demand and a much larger retail environment. Same day delivery and ecommerce demand reinforces the need for truck drivers and an intermodal approach to delivery.

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