According to Mintel’s Consumer Trends 2030 report, in the next decade consumers will be increasingly interested in personalized solutions for everything from health and wellness to genetics-based meal planning kits, and retailers looking to meet demand and increase customer satisfaction will increasingly look to create a seamless online-to-offline retail experience.
What do these trends mean for the LTL industry and beyond? For starters, there are quite a lot of changes coming to the industry in the near future and forward-thinking 3PL companies like Amware have already started preparing.
Technology Impact on the LTL Industry
As cities focus on sustainability and look to increase air quality and lower traffic congestion, new technology regulations could impact the cost of doing business. As the electronic logging devices (ELD) mandate is now in full effect, all trucks using the outdated AORBD system must now be equipped with an ELD. While it’s a great thing for driver safety and the industry overall, it has been a meaningful expense for many carriers, lending to across-the-board rate increases.
Technologically-enabled vehicles may not stop there, however, as entire cities are being designed around autonomous transportation for both public and private sectors. This will be seen not only in the form of mass transit, but also in freight and LTL shipping, as more vehicles are equipped with built-in augmented reality (AR) features. As the cost of diesel fuel continues to increase (7.7% per-mile last year according to the American Transportation Research Institute), carriers may be looking for alternative options–a choice that is likely to be driven by consumer demand for sustainable shipping practices and government regulations globally. While we don’t anticipate giant leaps in autonomous shipping in 2020, it’s something to watch as automotive technology continues to evolve.
Freight Rates will Likely Continue to Increase in 2020
As major online retailers like Amazon internalize their fleets of truck drivers, the labor shortage in the trucking market has become even more acute. Driver shortage has forced many carriers to make the position more attractive with higher wages and additional benefits. While this is a great opportunity for new drivers and those looking to take advantage of the surge, it has the downside of driving up the cost of LTL shipping services for shippers and, of course, consumers.
LTL freights have continued to rise in recent years and major carriers like UPS are already announcing increases for 2020. Their 2020 General Rate Increase (GRI) notes they’ll be increasing LTL freight rates by 4.9% this year. As competition in the LTL shipping industry continues to increase, shippers would do well to take advantage of a full-service third-party logistics company who can offset costs by offering competitive rates from multiple carriers.
Stability and Sustainability Coming to the LTL Industry
The shift from the full truckload model to a mostly less-than-truckload shipping model has certainly impacted the logistics and transportation industry. In years past, LTL carriers had to ramp up their capacity quickly as consumers shifted from an in-store shopping model to a home-delivery model. However, now that the industry has shifted in both capacity and ability with the help of LTL and local parcel delivery, the LTL industry is becoming more stable.
As demand grows more consistently and LTL companies can more easily prepare for busy buying seasons, retailers can feel confident in LTL shipping carriers’ ability to deliver on time and at a reasonable (albeit higher) price. With a third-party logistics company (3PL), shippers can find the best prices for their LTL shipment needs and get access to the tracking and tracing necessary to ensure everything is running smooth and on-time.
Stay Ahead in 2020 and beyond with Amware
To learn more about how 2020 LTL trends will impact your LTL shipping, contact the team at Amware. Be sure to ask about Amrate, our proprietary 3PL software that brings all your shipping needs into one single easy-to-use platform, or request a free trial below.