8 Things that Impacted Freight Transportation in 2015
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It’s been a transformative year for freight transportation. From new government regulations to the emergence of disruptive technology, here’s a look back at some of the hottest freight transportation topics of 2015.
- West Coast Port Lockout. The year opened with a contentious labor contract negotiation on the West Coast between the International Longshore and Warehouse Union and the Pacific Maritime Association. The conflict caused a series of slowdowns and port closures, affecting 29 ports in total. Although the labor issues are over, the affected ports are still dealing with the aftermath—cargo surges from big ships, chassis dislocations, and lengthy truck delays at terminal gates (JOC.com).
- Plunging Fuel Prices. We’ve seen a steep decline in oil prices over the past year. Now at less than $50 per barrel, many are wondering how much lower prices will get. Shippers are benefiting from lower fuel surcharges, while transportation providers have seen both positive and negative effects. Though operating costs are lower, transportation providers that serve the retail industry have benefited from increased discretionary income that consumers have as a result of lower prices at the pump (Dan Goodwill & Associates).
- FSMA & Sanitary Transportation. The FDA’s Food Safety Modernization Act (FSMA) has been the most extensive reform of our food safety laws in more than 70 years. New rules implemented this year have affected not only food manufacturers, but also those who transport food products. As scrutiny over manufacturing, packaging and distribution of the product continues to grow, it will be increasingly critical that carriers, brokers, 3PLs, and truckers alike are well versed in the compliance standards of the shippers and receivers they partner with.
- Mergers and Acquisitions Galore. The amount of transportation and logistics acquisition activity this year has been staggering. According to PwC, the total value of those deals reached $97.9 billion in Q3—a 55 percent year-over-year increase (Fleet Owner). As shippers look to trim the number of service providers they work with, we’re likely to see more consolidation in the near future. Carriers and 3PLs with the best technology, service, and national reach will come out on top.
- China’s Slowdown. China’s exports fell 8.3 percent year-over-year in July this year, leading to the devaluation of its currency. We’re beginning to see the emergence of a new era in China—one where both the middle class and labor costs are growing. In turn, China’s manufacturing sector is losing market share (JOC.com). These shifts have significant impacts on global trade, which is forcing many companies to rethink their supply chains.
- The Rise of On-Demand Everything. The massive success of Uber and other technology companies offering on-demand services has led to a revolution in consumer expectations when it comes to efficiency and convenience. From on-demand grocery delivery to crowdsourced warehouse capacity, many companies aiming to disrupt the supply chain and transportation industries have emerged.
- Investment in Technology. Compared to last year, there have been fewer truckload capacity shortages in 2015. Because of this, the most competitive transportation providers invested in technology to improve asset management and driver efficiency. Carriers and 3PLs are making use of more technology and data analytics now than ever before.
- The LTL Renaissance. Increased manufacturing and a growing need for last-mile delivery of items not easily packaged and conveyorized have given a bump to the less-than-truckload (LTL) market. After years on the decline, the combined revenue of the 25 largest LTL carriers jumped by 9.1 percent this year (Dan Goodwill & Associates).
It’s been quite the year for the supply chain and transportation industries. We’re likely to see many of these topics continue to resonate in 2016 and beyond.
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