Today, it’s hard to imagine that even a decade ago, brick-and-mortar stores were the norm. Though e-commerce had emerged, customers were still wary due to fears of losing money, products, etc. Since the pandemic, all such fears had to be sacrificed at the altar of limited mobility.
This was also the time when novel innovations in secure digital payments arose. As the online transaction numbers increased, companies were under pressure to supply their goods and services fast. Naturally, the fallout of this had to be borne by the trucking industry.
In this article, we will discuss how a dramatic rise in online retail sales affected the trucking industry. Buckle up to learn more about the good, the bad, and the ugly.
The Favorable Effects of E-Commerce on the Trucking Industry
Let’s start by discussing the positive side of e-commerce and its
This has led to many positive impacts, especially for the long haul. Let’s discuss two of the most evident and important ones.
Last-Mile Delivery
With juggernauts like Amazon and eBay dominating the e-commerce scene, customers have become accustomed to faster deliveries. Amazon even offers same-day delivery for many products due to a close-knit warehousing network.
Last-mile delivery is also taking the front-row seat. It is the last leg of the supply chain, wherein the parcel or package has reached its final destination. From this point, it must be sorted and delivered to the customer’s address. Despite being the most important step of all, this is also the most expensive and complicated.
As per Deloitte’s 2023 Global Smart Last-Mile Logistics Outlook report, last-mile delivery accounts for 41% of the total logistics cost. However, at least 90% of customers expect their goods to be delivered within two to three days (no matter the distance!).
The trucking industry is revolutionizing not just to make last-mile delivery possible but to also reduce costs in the process. The following strategies are used to this end.
- Load capacity is optimized by batching the deliveries. This also reduces the number of vehicles needed.
- On-demand delivery platforms, telematics, and predictive analytics are used to notify and rectify any delays.
- Data analytics tools are used for demand forecasting to optimize inventory.
- Route planning and automation help streamline the transportation process.
In some cases, the customer-centricity takes a turn where the customer is offered alternative delivery options. Moreover, there is clear communication and real-time tracking that offers further reassurance.
Employment Growth
Did you know online retail sales only accounted for 0.6% of total sales in 1996? Today, the same stands at 15.6%. Besides increasing e-commerce purchases, customer expectations for delivery times are also high. Since customers want to wait as little as possible for their desired products, the supply chain has had to become tightly knit.
This means there has been a dramatic uptick in logistics and warehousing industry employment. In 2023, around 3.5 million truck drivers were employed in the US. Even then, this industry is facing a critical shortage of driving professionals. This in itself bears testimony to the rapidly growing demands of e-commerce companies.
Besides these two main positives, e-commerce has also helped the trucking industry scale itself through data analytics. Customers can now enjoy more affordable shipping, and tech adoption across the industry has rapidly increased.
The Downsides of This Drastic Shift
As much as e-commerce has contributed to the growth of the trucking industry, it has also had its downsides. Perhaps the most concerning one is that of an increase in the number of road accidents. One example would be the city of St. Louis, Missouri, which is known to be a logistics hub.
This means St. Louis’ interstates and highways are packed with large 18-wheeler trucks and semi-trucks throughout the day. This city was claimed to have the worst drivers in the US, thereby contributing to poor road safety.
Any mishap would not only lead to gruesome life-altering injuries but also call for the involvement of a St. Louis truck accident attorney. The plaintiff will be eligible for fair compensation based on their injuries, age, etc. However, the process can be complex.
TorHoerman Law states that truck accidents often involve multiple liable parties. Hence, proving negligence and fault can take weeks or months in some cases. Notwithstanding the aftermath of crashes, the trucking industry is also grappling with labor shortages and high fuel costs.
We previously mentioned that e-commerce sales accounted for 15.6% of total sales in 2023. This percentage is expected to become 16.6% in 2024 and a whopping 20.6% by 2027. If these are true, one can only imagine its
Technology Shines a Light at the End of the Tunnel
For the downsides of e-commerce and its
Technologies like telematics are increasing supply chain efficiency to reduce delays and streamline the logistics process. As short-haul fleets increase, the pressure on long-haul drivers should decrease. This would encourage more professionals to join the industry. Moreover, driver retention should see a rise.
Similarly, modern-day trucks come equipped with advanced safety systems that help prevent accidents. These may include the use of sensors, radars, and cameras. Telematics helps in route planning to ensure faster and safer deliveries. This also increases an individual vehicle’s fuel efficiency.
Overall, the trucking industry is expected to showcase tremendous growth in the upcoming years. Between 2022 and 2031, it is maintaining a steady CAGR of 5.20%. Compared to e-commerce, this may seem insignificant.
If anything, such statistics point toward the ongoing challenges faced by the trucking industry due to e-commerce disruption. Should the roadblocks be addressed at the earliest, we may see the growth rate rising further.
