With 2019 coming to a close let’s take a look back through the developments and challenges of 2019.
Digital Advancements
Autonomous trucking was a hot topic throughout 2019 as several firms have continued to develop and test fully or partially autonomous trucks for long haul and short haul port applications. While rapid technology progress is being made, it will likely still be a decade or so at least before autonomous trucks and cars become a common site along the nation’s roads. Along with autonomous trucking, drone delivery of parcel packages has also progressed with test deliveries made. As with trucking, the FAA’s regulations will be a determinant of how soon we see drones deployed for commercial delivery use.
Many tech enabled and traditional logistics providers have continued to up their investment and adoption of technology to create better visibility, better use of capacity and more accurate data analytics to improve shippers’ supply chains.
Capacity and Pricing
Perhaps some of the most dramatic challenges of 2019 have been related to over capacity and softening rates. A slight manufacturing pull back and lessened import volume partially due to ongoing trade agreement disputes with China and other nations, lowered transportation demand across all modes thus dropping rates particularly hard in the over the road trucking markets. While some shippers were able to retain quality of service and see decreased prices, as trucking companies competed in the spot market for loads, others had service issues due to the bankruptcy and shutdown of numerous large carries throughout the year.
Intermodal services also experienced changes through the continued deployment of precision scaled railroading, an operating practice which seeks to maximize return on assets for railroads. Many origin/departure pair lanes were simply eliminated as volumes and prices were deemed insufficient by rail operators, while others experienced large service delays, if you were lucky, your shipment lanes saw service improvements.
A continued push for inland port facilities has increased the amount of freight that arrives inland in the east coast ports as well as created new opportunities for shippers to utilize rail transportation to get their freight further inland in the wake of heightened ELD driver requirements that increased the price of drayage services. Over the next several years expect to see a continued increase in the east coast ports’ market share relative to the west coast.
Regulation and International Trade
International Trade agreements became commonplace topics on national news this year as new trade agreements were ironed out between key trading partners in Europe, North America and particularly with China. Ongoing Brexit talks also added to the uncertainty shippers and logistics providers had to navigate this year. This was a key contributor to the overall drop in freight volume throughout 2019.
Looking into 2020 we will likely see continued volume volatility as trade agreements are further discussed and negotiated. The addition or removal of tariffs on trans pacific lanes could produce the most impactful changes going into 2020.
Continued push for technology adoption will benefit shippers who embrace shipping platforms that take advantage of the latest tech offerings and visibility.
Another development that will continue to require regulatory attention will be the relax in hemp and cannabis laws, which as they become more widely legal will require a transportation and logistics network to meet the retailers’ demands.
Emissions regulations continue to tighten for everyone in the transportation industry and particularly for ocean carriers which are facing an immense amount of capital investment needed in preparation for the IMO 2020 standards, which calls for a massive cut in tolerable exhaust emissions from large cargo ships. While great for the environment, it creates a lot of pressure on steamship lines whose margins and volumes have been thin and reduced throughout 2019.
Stay tuned for more updates from Zmodal coming along very soon! We want to give a special thanks to everyone that has made 2019 a landmark year for Zmodal! Look for more developments coming in the first part of 2020.
Zmodal is a digitally enabled logistics provider providing efficient capacity, powerful visibility and analytics to shippers.
