Canadian Shipper


Major Freight Trends

1. The 10 Miles Per Gallon Truck

At a time when most truckers are striving to operate their fleets at 6 miles per gallon, talk of 10 MPG may seem like science fiction. The good news is that fifteen industry manufacturers have joined together in the 21st Century Truck Partnership. Led by Daimler, Navistar and Peterbilt and a joint venture with Cummins and Peterbilt, they plan to have working prototypes within two years. The four projects that fall within this initiative are experimenting with engines and heavy duty hybrids, vehicle power demands, idle reducing technology and new lightweight materials such as carbon fibre and high strength steel.

2. Omni-Channel Distribution will Transform Retail Shipping

Major retailers are experimenting with a variety of different retail/distribution models to serve consumers today. They are also experimenting with the size and design of local retail outlets. Some are opening stores with smaller footprints. While still offering a range of merchandise, they are also serving as local distribution centres for consumers wishing to stop by for a pick-up and as e-commerce fulfillment centres.

3. Shipper-Shipper and Shipper-Carrier Collaboration

This has been a popular theme for the last decade or more. The trouble has been that the theory has not matched up with reality. At the recent 2014 Surface Transportation Summit, the President of Meyers Transport made an impassioned plea for shippers and carriers to collaborate. The post-Summit survey results indicated that this message resonated with the audience and the time is ripe for a more unselfish collaborative approach. This message seems to be hitting home.

4. Moving from Re-Shoring to Right-Shoring

Much has been written in recent years about the expected re-shoring (aka near shoring and insourcing) movement. Many companies are employing a “Right-Shoring” model. They are weighing the size and location of the consumer market, the location of key vendors, distribution costs, the time to ship to market, the level of manufacturing skill required, currency factors and other items and making a thoughtful determination as to the one or more locations where their factories should be located.

5. Supply Chains in the Energy Sector are going through Major Change

Alberta’s Energy sector growth has largely been influenced by new capital investment. Within the next year or two, the level of capital investment supporting new development of the Energy sector will be surpassed by MRO (maintenance, repair and operations) expenditures. This will affect supply chains and the future growth of industry in Alberta and across Canada.

6. “Designed by Me” will change Manufacturing and Freight Transportation

Since at least the early ’90s, we’ve been hearing that Mass Customization was going to change the consumer landscape. With the exception of custom-crafted luxury goods like bespoke tailored suits, most of our purchases are still very standardized. But despite the slow progress, we may finally be on the cusp of a new era in product design, in which truly “designed by me” products will be available in a range of categories. The most successful manufacturers of the next ten years will be those that seize this opportunity before their competitors do.

7. Digitization, Miniaturization and Packaging Improvements will be Game Changers

We have all witnessed the digitization of music, books and movies. We are seeing other products shrink in size as we move from desktop computers to laptops to tablets. These are all game changers for freight transportation. Trucks are now hauling loads of tablets rather than PCs, sound systems and cameras. Better packing means better cube utilization and fewer trucks.

8. Asset Light Companies, Networks and Partnerships to Increase in Importance

In my Top Transportation Trends in 2013, I highlighted the evolution of asset light companies. I expect this evolution to grow in several directions. First, the asset light LTL carriers (e.g. Roadrunner) offer a flexibility and nimbleness that the large asset based carriers don’t have. Carrier partnerships in all sectors are likely to increase as asset based companies seek to open new markets without adding assets. Whether on a local, regional, or national/international basis (e.g. Reliance Network, Landstar), this model should grow in prominence.

9. Data Mining comes to Freight Transportation

Shippers are starting to better understand the impacts of density, product description, packaging, weight per shipment, lane balances, seasonality, loading and unloading times on their freight rates. They are gaining an understanding of shipment consolidations, pooling, collaboration and other tools to control freight costs. Good freight data is the key to taking advantage of cost saving opportunities, of maximizing cubic capacity and of optimizing modes and carriers.

10. Last Mile Deliveries to become the New Battleground for Freight

Omni-channel marketing and same day deliveries are pushing warehouses and retail outlets closer to customers. Miniaturization, product customization and improved packaging are resulting in smaller products, manufactured and distributed closer to the end consumer.

This all adds up to a very attractive scenario for last mile, small package delivery services.