It’s no secret that the pace of technological development today has been unprecedented. This impacts our day-to-day lives, as well as the industry we serve. More so than any other time in history, we’re not only witnessing, but also participating in, a fundamental shift in our world because of these advancements.
While attending the Omnitracs Outlook User Conference 2018 in February of this year, Kevin Haugh, Chief Strategy and Product Officer for Omnitracs, shared his insights on the forces that are driving these changes.
“We’re witnessing tremendous change within the industry,” says Haugh. “It’s not just decade level change, or lifetime change - it’s a century change.”
It’s not just the level of advancements we’ve witnessed, but the increased speed at which things are changing in the transportation industry. Haugh shared the following seven “forces of change” affecting transportation and logistics:
Record economic growth
According to Bob Costello, Chief Economist and Vice President of ATA, the current economic expansion we’re experiencing is the third longest in history. And, he says, while usually at this point we may be gearing for a recession, we’re actually ramping up for continued growth.
From a consumer perspective, there has been an uptick in two buying trends that will continue to have an impact on freight: food and beverage, and online purchasing. Within the last two years, a shift has happened where consumers spend more money at restaurants than grocery stores, says Costello. Add to that the ever-increasing spend for online purchases.
Distribution within the supply chain continues to shift as retailers cycle through products more quickly, aided by the increase in distribution centers around the country requiring less inventory on the shelves of brick and mortar locations. This will continue to drive the need for more frequent deliveries.
Record level truck and trailer orders for the first quarter of 2018 have solidified the positive impact the trucking industry has on the economy as well.
Driver shortage
According to a recent study and white paper from ATA’s Truck Driver Shortage Analysis 2017, the driver shortage is expected to reach 50,000 by the end of 2017.
“Over the next decade, the trucking industry will need to hire roughly 898,000 new drivers, or an average of nearly 90,000 per year,” according to the report. “Replacing retiring truck drivers will be by far the largest factor, accounting for nearly half of new driver hires (49 percent). The second largest factor will be industry growth, accounting for 28 percent of new driver hires.”
Recruit is crucial, and there’s no one answer on how to fill empty seats. Costello advises with higher demand, wages and benefits should go up. Aspects such as more time at home, a clearer career path for those entering the industry and considerations on changing the age for commercial driver’s licenses play key roles in this shift.
Enhanced safety and compliance
There are a number of regulations established that quantify safety in the industry.
While hours of service (HOS) and Compliance, Safety, Accountability (CSA) have been familiar to anyone operating a truck on the road today for a number of years, the electronic logging devices (ELD) mandate places an additional method for complying with safety regulations.
Not to mention, with the implementation of ELDs in trucks on the road, data procurement becomes even more streamlined as information is collected from these devices versus paper logbooks.
Ever-increasing customer expectations
“There is a monumental shift in people’s expectations on how and when they want products,” says Haugh.
The previous model focused on delivery of products to retail stores, where customers would travel and purchase from these locations. Now, freight will move additional miles with additional capacity to ensure on-time delivery to a specified location.
One example many of us are familiar with is same-day delivery offered by Amazon. This has raised consumer expectations further, even since the introduction of two-day or one-day deliveries.
Explosion in data and information
The amount of data is growing by 40 percent every year,” says Haugh. As the amount of data grows more quickly, “we’re connecting more drivers, more trucks, more assets. This allows us to collect more data,” he adds.
By 2025, Haugh says there will be 50 billion connected devices in the world - this includes smartphones, appliances, vehicles, etc. All of these devices create an opportunity to connect like never before. Anything and everything can collect data from a user. The challenge then becomes, what do we do with all of this information?
Advanced technologies
As more data is collected, businesses will continue to look at ways to leverage this information.
This cannot be done by humans alone; algorithms to analyze and assess data, along with continued adoption of artificial intelligence (AI) and machine learning can fine-tune prediction-based operations and maintenance, and provide additional insights on this massive amount of collected data. Without that technology, the amount of information just becomes overwhelming.
Some examples include the monitoring of critical events in real-time to provide feedback and suggestions, or assess the results to avoid issues in the future; making data more presentable to the end user; optimizing multi-stop pickups and deliveries; conducting over-the-air drivetrain updates; and more.
Under-utilized capacity and desire for greater efficiency
As data collection and optimization continues, it will aid in the ability to maximize vehicle, trailer and driver capacity more efficiently. Haugh says 30 percent of trucks are driving around completely empty. And, he adds, studies have shown that 3 to 5 percent of drivers' time is spent waiting to pick up a load.
How can this data help improve the optimization of routes? How can location- and load-based data help to provide platooning opportunities?
Conclusion
While these trends provide a more high-level view of the industry as a whole, each item will have a direct or indirect impact on maintenance operations. It remains to be seen, but the economy, advancements and technology, and the push for ever-increasing efficiency, will continue to drive the growth and changes in our industry.
