Transportation Impact Audio Blog

With trucking rates continuing to decline, industry experts are wondering where the market will bottom out. In the article “Race to the Bottom as Long-Distance Trucking Rates Continue to Fall,” Ibrahiim Bayaan, Chief Economist at Freightwaves, explores that question.

With greater than ever pressure on retailers to fill orders faster, the whole industry is looking for cost-effective ways to optimize the pack and ship process. At the same time, rising labor costs are forcing companies to look for new ways to gain more productivity from their warehouse. Many are finding technology to be the fastest and most cost-effective way to improve productivity and fulfillment/delivery turnaround times.

For several years, the logistics and transportation industry has been plagued with headlines of the truck driver shortage and how it is affecting the industry. Carriers point to this as one of the main reasons for tight capacity, and as a result — higher rates. But there may be more to the story.

In 2019, many logistics and transportation trends center around increasing visibility and higher service levels — for both service providers and their customers.

Amazon has long been the front runner in ecommerce, and for several years it has been eyeing the logistics and transportation industry as well. Amazon has been moving away from its reliance on the major carriers by giving some of its business to independent, regional providers. The company has also been growing its fleet of private trucks to be able to deliver even faster.

Online shoppers have sky-high expectations for every purchase they make these days. This has made creating a flawless customer experience the necessary goal for most online retailers. These expectations are largely the result of what’s known as the “Amazon Effect,” which has shoppers expecting ever-faster delivery for little or no cost.

On May 30th, FedEx announced a new plan to begin offering 7-day-a-week Ground delivery.From the company statement: “FedEx Ground delivers seven days per week during the holiday peak season, and beginning in January 2020, this service will continue year-round for the majority of the U.S. population. The company is also rapidly integrating FedEx SmartPost package volume into FedEx Ground standard operations and increasing large package capabilities.”

One of the main reasons that online consumers shop on Amazon.com is for quick delivery. That, and the extensive selection of items. Amazon Prime members can get just about anything they want delivered within two days — a major perk for shopping with Amazon.com. Now, that deal just got sweeter for consumers as Amazon is making an $800 million investment to cut the Prime delivery window to just one day. For U.S. consumers who pay $119 a year for the service, this is a big upgrade.