Experts Reveal Top Transportation Trends to Watch

In this article, leading experts from various sectors in transportation industry will discuss transportation trends you should take a closer look.

1. James Winebrake, Dean of College of Liberal Arts, Rochester Institute of Technology 

There are a number of important trends happening in the freight industry, spanning all modes of transportation: trucking, shipping, rail, pipeline, and air. In the trucking sector, the biggest change has been the federal government's movement to impose fuel efficiency and greenhouse gas emissions standards on all heavy-duty trucks. The impact of these new regulations will be substantial and combined with low oil prices may affect how companies operate. 

In the shipping sector, new rules from the International Maritime Organization on sulfur limits in fuel is transforming that industry by requiring ships to burn low sulfur fuels; additionally, there is currently over-capacity of ships internationally (for a variety of reasons), and that will have a major impact on the ship-building industry. Related to shipping, international port infrastructure has been expanding - perhaps too rapidly - and it will be interesting to see whether these investments pay off. In the U.S., for example, many of the east coast ports have expanded exponentially over the past decade in preparation for the Panama Canal expansion; however, it is unclear whether increased activity in the canal will lead to more business for these ports. 

In the rail sector, the big issue is capacity. More demand for rail, particularly from the U.S. oil sector, has created pretty thin capacity margins, especially in the Central North part of the country. Given the costs of infrastructure development, I suspect these tight capacities to remain for some time and drilling companies will be looking to other alternatives (namely pipeline, truck, or ship) to move oil around the country.

Lastly, air freight has been increasing rapidly over the past decade - a trend I suspect will continue. However, the costs to ship by air are orders of magnitude higher than other modes, so air shipments will continue to be limited to moving high value goods.

2. Brian Beans, Transportation Industry Specialist, Brother Mobile Solutions 

Many freight transport companies are adopting onboard computing systems to automate routing and reduce the need for driver paperwork. A recent directive from the Federal Motor Carrier Safety Administration (FMCSA), called the ELD (Electronic Logging Device) will soon mandate the use of electronic logging devices across the industry.

An ELD is an electronic logbook that records, among other data, a driver's Record of Duty Status (RODS) and driver Hours of Service (HOS). Motor carrier fleets have until 2017 to install ELDs and fleets already using electronic logging technology have until late 2019 to ensure new specifications are incorporated into their existing solutions. A key component of an ELD system is a mobile printer enabling the driver to print documents right from the truck cab in compliance with government regulations.

3. Adam Kahn, Sr. Director, SmartDrive Systems

The trucking industry continues its focus on safety by investing in technologies that are protecting its drivers as well as its fleets. Drivers and Managers are now safeguarding their fleets with insight that wasn't historically possible. Video and data analytics provide visibility into the details of an event within minutes, helping fleets discover new techniques that increase both safety and driver retention.

The adoption of video-based safety systems has enabled fleets to capture data and video, providing a better view of what actually happened. SmartDrive, for example, captures video 10 seconds before and 10 seconds after an incident occurs, which allows fleets to assess what happened leading up to the crash. Video evidence can exonerate the driver of false claims, or identify best practices that could be used to increase driver performance.

With this technology at hand, the industry is improving its safety records and better protecting its drivers.

4. Eric Beckwitt, CEO, Freightera

With the rise of competitive online freight marketplaces, more information will be exposed, including prices and customer satisfaction. Thousands of well-run local and regional carriers will be able to compete against the larger firms with larger sales forces. Smaller companies can offer lower rates and better service in the specific market niche they serve.

Moreover, as pressure mounts on governments and industry internationally to reduce greenhouse gases, expect more companies to offer real solutions that cut costs and reduce emissions. In North America the low hanging fruit for long-haul loads is rail. Each full “truckload” equivalent of freight moved by rail reduces C02 emissions by 66%. Online freight marketplaces allow shippers to instantly compare the cost of traditional truck vs rail freight, and book with a button click. Remarkably, rail can also be cheaper with savings up to 60% over road freight.

5. Mary C. Holcomb, Dept. of Marketing & SCM, University of Tennessee, Knoxville

Because the domestic motor carrier industry has few barriers to entry, capacity before the Great Recession generally exceeded demand with few exceptions. As a derived demand, the severe economic recession significantly reduced the need to move things such as raw materials and finished goods. This led to an environment that had much more supply than demand. However, the end of the recession and an increase in demand for transportation services did not restore the motor carrier industry to its former state. Constraining factors included tight (or non-existent) credit, much more expensive equipment (tractors), more restrictive federal regulation regarding Hours of Service (HOS) for drivers, the implementation of the CSA Safety Measurement System, and an increasing number of drivers leaving or retiring from the profession. In addition, the motor carriers that survived the Great Recession learned a critical lesson that the airline industry learned years earlier – the balance of supply and demand is crucial to their financial viability.

While several of the factors that created the “Perfect Storm” in transportation have abated in the past several years including more available credit and the suspension of the July 2013 HOS Rules provision that required the use of a 34-hour restart, the driver shortage is the factor that has the potential to completely change how transportation is managed. The double-digit growth of e-commerce has produced an increasingly complex distribution challenge for any company that sells products. The variable nature of demand, in industrial and consumer markets, is adding to a constantly changing execution plan.

In the past, trucking companies were able to respond to the dynamic needs of their customers. The driver shortage forecasted to grow to over 200,000 tractor-trailer operators by 2020. Even with recent increases in wages and higher signing and retention bonuses, the demand for drivers is outpacing supply. The burning question on the minds of trucking companies and the firms whose products they ship is: Who will deliver the goods in the future?

6. Adriana Diener, Global Lead for Freight and Logistics, Accenture

Many logistics companies are adopting new technologies from the Internet of Things to bring needed visibility on the shipment process. This includes the ability to track a ship in the middle of the ocean, a pallet inside an aircraft, temperature of frozen cargo, etc. This has been a priority of shippers for a long time in order to optimize their supply chains. This technology used to be cost prohibitive but it is becoming increasingly affordable. For example we are developing solutions to track containers with technology that transmits information at predefined milestones, reducing the need for unnecessary updates to save battery life and reduce collection of data with no added-value. We are also implementing ship engine/component monitoring solutions to prompt proactive maintenance tasks to reduce risk of failure. Understanding and investing in these technologies will be important for logistics companies and whoever gets there first will have a competitive advantage.

7. Wally Ibrahim, CTO and Co-founder, project44

Freight APIs enable enterprise systems (ERP, BPM, TMS) to connect in real-time with transportation carriers, facilitating instant rate quotes, dispatch, track and trace, and access to documents such as BOLs or POD. The information of freight shipments is now reliable and up-to-date resulting in end-to-end visibility that powers supply chains. With Freight APIs, shippers and retailers have, for the first time ever, real-time access to the big data required to proactively react to transportation shortfalls. Ultimately this will protect them against stock outs, allow them to reduce their inventory, improve their ROIC, lower shipping costs, and streamline their transition to e-commerce.

8. Eytan Buchman, Marketing Manager, Freightos 

From a startup perspective, we're seeing huge innovation with regards to information connectivity across the supply chain. More logistics startups than ever have popped up to address moving information as well as freight moves, while tech investments in logistics have shot up to $1 billion in the past 18 months.

EDI just isn't enough. Forwarders want flexible, real-time routing and pricing from carriers, while shippers want to instantly price and book freight quotes, comparing sourcing alternatives, shipping routes and modes. Alibaba reflects how sourcing is now online but freight has yet to reach the same level of progress. 2016 and beyond will see a significant shift, with accessible platforms, big-data freight operations and enhanced connectivity.

9. Tan Miller, Director of Global Supply Chain Management Program, Rider University 

One major issue you are probably aware of is that there is a significant, and growing shortage of long haul truck drivers in the US. This has become a major operational bottleneck for some firms, particularly in the peak quarter end and year end periods of demand for trucking services. Given this issue, it will be interesting to keep tabs on the following over the next couple years:

- Will intermodal truck/train services be able to significantly increase market share in the next couple years? For many years, the question has been can intermodal really make headway vs. truckload for long haul moves in the US. Now with this dramatic long haul driver shortage can intermodal service draw market share from truckload - because on intermodal moves, the majority of the trip takes place via rail and the truck portion of the trip can be handled by short haul drivers

- There is a lot of current popular discussion of, and experimentation with the "driverless car". The concept of "driverless trucks" however has more quietly with less press also attracted much research and development thought and effort. Will this concept transition in the coming years to a reality where driverless trucks become a significant operational component of the domestic transportation system?

10. Ron Atapattu, President, Overseas Cargo Inc. (ShipOCI) 

Some of the most recent trends I've seen in the freight transport industry involve instant delivery. Shipping giants like Amazon and UPS are leading this trend through the use of drones or other instant methods for delivery. In turn, more customers will begin to demand speed and greater visibility of their supply chain. As of now, many companies do not even offer an ASN (Advance Shipping Notice) or access to track or view shipments in real-time; however, with this growing trend in instant delivery, companies are going to have to invest in software and technology that gives customers transparency to know exactly where their shipments are from load-in to delivery.

This segues into another issue about accountability and security. The present environment of terrorist threats intertwine with the daily activities of shipping, so there is an increased accountability for truckers to know what they are transporting, where, and who will be handling the shipment along the way. This issue has already become a critical security check by TSA for Indirect Air Carriers, and in time will become the standard for all transportation activity. How companies tackle this will become an important role in daily business.

11. Brian Moran, Senior Director Product Management, Savi

Major trends in transportation have changed little over the past few years, with many challenges still existing around supply chain logistics planning, such as cross-docking and accurate estimated time of arrivals (ETA). In continued efforts to address these challenges, we anticipate that transportation companies will augment traditional transportation management systems (TMS) with sensor analytics technologies. Sensor analytics technologies will provide companies better visibility and deeper knowledge of their supply chain performance based on the collection and analysis of real-time and historical data. This will allow companies to leverage existing data from TMS, GPS, and other sensor devices to accurately predict accurate ETAs and improve cross-docking initiatives. We expect to see a continued focus on cost reductions through better cross-docking and the use of multi-category distribution centers. Both of which rely on the use of sensor analytics technologies for increased visibility and accurate ETAs.

Are there other transportation trends to watch and why?

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