The transportation industry has been working hard to stay on top of a large number of orders as the economy continues to grow. While the government shutdown may have slowed things temporarily, a new review by Tompkins International suggests the strong growth seen among carriers will continue in the coming years, making logistics software a critical investment for transportation companies across the country.
Reasons for projected growth vary
Gross domestic product (GDP) is expected to expand by a little less than 2 percent in the U.S. and this number will grow by 2.2 percent globally. But the third-party logistics (3PL) industry is expected to grow at a much faster pace, perhaps expanding by three or four times GDP. This could result in 3PL growth reaching between 7 and 10 percent in 2013 alone.
A recovering economy isn't the only reason fleet owners and operators are expected to see more orders moving forward. The changing manufacturing industry is also playing a role, especially as more companies decide to move their manufacturing facilities out of Asia and closer to their home markets in the U.S. With more businesses choosing to cut costs and shipping times by leaving Asia and building plants in the U.S. and Mexico.
"Cross border trade with Mexico has been on the rise [and] the same can be said of Canada," said Valeria Bonebrake, senior vice president at Tompkins said to Fleet Owner Magazine. "We have seen Target, Nordstrom and others enter the market [as] the combined output of the NAFTA [North American Free Trade Agreement] region is $17 trillion. Thus 3PLs are broadening their services to capture these markets."
Handling growth with technology
To cope with the projected spike in business, carriers will need to determine how they can be as efficient as possible, cut costs and still make pickups and deliveries on schedule. Chris Ricciardi, chief product officer for cloud-based software developer Logistical Labs, told Fleet Owner that carriers may be adopting more cloud technology to ease processes and keep information organized.
The implementation of cloud processes is not the only way fleet managers are working to improve as business grows. More are turning to route optimization software to ensure their drivers are remaining efficient and cutting down on fuel use, especially with the driver shortage currently impacting the industry.