Opinion: Eight Predictions for Our Industry

This Opinion piece appears in the March 13 print edition of Transport Topics. Click here to subscribe today.

Tom McLeod

President

McLeod Software

In 2008, I wrote an article where I described a future scenario in which a driver in a truck is leading a convoy of several driverless trucks. In 2011, I began predicting that we would have autonomous cars on the market and on the roadways by 2020. These predictions seem to be turning out better than my 2007 prediction that Apple would not get much market share in the cellphone business.

Tom McLeod

Those that can anticipate the future are often in the best position to shape and benefit from it. With that in mind, here are my thoughts on what to look for in the next few years.

ELD Implementation Will Disrupt Trucking Landscape

Many smaller carriers will wait until the last minute to implement. Some will lease on with larger carriers, and some will exit the business voluntarily. Some will underestimate the financial impact of “running legal” and will go out of business six months to a year after they install electronic logging devices. So the disruption will continue for at least a year beyond the Dec. 18, 2017, deadline. Total for-hire truckload capacity will effectively shrink between 5% and 10%, which should raise rates and could put more trucks on the highways. Beyond the operational impact, the companies that use the ELD information effectively in planning will have an advantage, since a driver’s hours of service will be the definition of real capacity.

Freight Patterns Shift

Companies such as Amazon, Google and Uber all have designs on entering the freight market. Amazon plans to control more of the freight it is generating, from parcel to truckload. Uber has opened a freight brokerage. How much market share can these companies grab in the next five years? 5%? 10%? More? How big of a cut can they take from current brokerage and third-party logistics market share? And how attractive will their business models be to carriers as a source of freight?

FSMA Regulations Increase Reporting Requirements

Reporting requirements from shippers will create disruption in the refrigerated sector. Once shippers are accustomed to getting detailed reporting under the new Food Safety Modernization Act requirements, they will expand their requirements to shipments that are exempt from the actual regulations. Beyond meeting the regulations, it’s about meeting shippers’ requirements without adding too much cost and labor to your operation. The carriers that can deliver the reporting on a timely basis with minimal labor will have competitive advantage.

An App for Everything

We are just about there now. An app for load tracking. An app for lumper pay. An app for a parking spot. The apps will get more mature, and the best ones will be used more and more in their segments. This will work to make the overall system more efficient, just as getting turn-by-turn driving directions has done. The use of mobile devices to assist your people in the truck and in the office will become ubiquitous. Look for the apps that benefit your operation.

Millennials Will Drive the Economy

This is good news. The millennials, born between 1981 and 1997, are bigger than the baby-boom generation. They are just now old enough to start buying houses, major appliances, etc. Their spending pattern will be different than previous generations (they are more urban, marry later, etc.), but their size and arrival is great news for economic growth in the United States for years to come. They will also have an impact on the workplace. They grew up with technology, and they expect to use it at work. They will also have the skill and background to help implement it.

Best-Managed Trucking Companies Will Thrive

Freight moved by truck will continue to grow. The companies that can adapt to change, that are well-equipped and that can spot opportunity will be in great position to grow. Companies that know how to evaluate and pursue profitable lanes and customers will prosper.

Autonomous Cars on Roads by 2020

Autonomous trucks will continue to progress. The safety technologies that are now being implemented are bringing us closer to the autonomous truck. Automatic transmissions, collision avoidance, anti-rollover control, even cameras around the truck — these are all paving the way for autonomous trucks. These vehicles will make the driver’s life easier and safer. Fully driverless vehicles will likely be used only in narrow, specific applications and not in volume until around 2025. By then, we will be very comfortable with the operation and safety of these trucks.

A Rolling Technology Revolution

Trucks coming off the assembly line will be communication platforms with built-in cellular, Bluetooth and Wi-Fi. There will be more than 40 sensors on the truck, trailer and even the driver for real-time visibility and safe operation. This will result in an enormous flood of data to be managed, which will benefit those that are prepared and ready to make use of it. And hydrogen fuel-cell technology, which appears to be on the verge of practical application, would stand the industry on its ear. A proposed all-inclusive price model includes fuel, maintenance, tires and a load-matching service.

Taken together, these things represent enormous change. Let’s work to be in the best position to make the most of it.

McLeod Software was founded in 1985 in Birmingham, Alabama. Tom McLeod has long been active in American Trucking Associations, Truckload Carriers Association and Alabama Trucking Association. He also provides advice on the use of information technology to support trucking and brokerage operations.