Now is an ideal time for small and medium-sized distributors and freight organizations to take full advantage of the benefits of logistics software. The Great Recession led many businesses to reign in spending and control overhead costs, but ground transportation continues to be one of the most successful sectors of the U.S. economy despite relatively slow economic growth.
In fact, the U.S. Census Bureau and the Bureau of Transportation Statistics (BTS) recently released the latest installment of the "Commodity Flow Survey," which showed that trucking, specifically, is the most widely used method of transportation for shipping goods and other commodities across the country. The survey is updated every five years and provides one of the most valuable measures of economic activity for industry experts, business owners and policymakers. The results revealed trucks were responsible for moving 73.7 percent of all freight value in 2012, as well 70 percent of total tonnage during the same year. Comparatively, only 3.3 percent of freight value was transported through rail systems.
"The Commodity Flow Survey showed once again that trucks move the vast, vast majority of freight in the United States," Bob Costello, chief economist at the ATA, stated in a press release. "Since it is only updated every five years, the CFS report is a critical tool for policymakers and researchers in examining the freight market. The government should ensure that reports like it, including the Vehicle Inventory and Use Survey, are updated on a regular basis."
Preparing for more time on the road
The dominance of the trucking industry will likely provide a variety of opportunities for growth in the coming years. However, fleet owners must be sure to invest in the right transportation management software effectively meet any unexpected challenges that may come up along the way. For instance, one of the side effects of a more active ground transportation sector is the fact that many shipments and deliveries will cover more miles than before. The CFS found that in 2012, the average haul length for most trucks was 212 miles per assignment. Longer distances may become the norm in the near future, especially as trucking outperforms all other ground transportation modes. Reliance on rail and barge has declined sharply in recent years.
"The length of haul data is crucial, particularly when talking about rail and truck competition," Costello added. "While feasible under certain conditions, the potential for rail intermodal to gain a significant amount of truck market share is limited. Now more than ever, the two modes are more likely to complement each other than compete for business."
Ensuring sustainability and avoiding traffic violations
Route optimization software can make it easier for fleet owners to control their overhead costs amid the need to extend the number of miles individual vehicles put on a yearly basis. The volatility of the oil and gas market often has an unpredictable effect on the price of fuel. As a result, the ability to identify the most efficient shipping routes can produce valuable long-term savings. The growing public interest in limiting the impacts of global climate change has also led many corporations to find ways to make their supply chains more sustainable. According to a recent report from the online publication Supply Management, the toy company The Lego Group has announced a partnership with the World Wide Fund for Nature (WWF) in which it set a target to cut greenhouse gas emissions 10 percent throughout the entire production cycle by 2016. Distributors may find themselves in the middle of such initiatives, trucking is one of the largest source of climate-altering pollutants in the U.S. economy. Direct route software can lead to lower fuel costs by identifying more efficient transportation assignments.
Automated fleet management programs may even lead to a sharp reduction in traffic violations as a result of more time spent on the road. A white paper from the traffic enforcement company American Traffic Solutions said one fleet business in the U.S. reported a 45 percent increase in tickets between 2005 and 2011. With the right trucking software, companies can make the most use of their time on the road and avoid the risk of adding any additional overhead costs through traffic-related violations.