Shifts in the economy have had a lasting effect on over-the-road (OTR) shipping. As productivity in manufacturing declines and freight volumes level off, the industry has prepared for maintaining heightened service levels through the adoption of technology.
Shifts in Work Culture have Lasting Effects on OTR Shipping
Episode 3 of Banyan Technology’s Tire Tracks podcast features Curt Kouts and Doug Potvin from Trinity Logistics, a top 25 broker in the U.S. The duo discusses the effects of shifts in the economy on the supply chain and what they see for OTR shipping in the next few years.
“It's going to be an interesting 2022 and 2023, especially with regard to the economic situation going on right now with the interest rates continuing to rise,” said Potvin, CFO of Trinity Logistics. “We're already beginning to see a little bit of a slight decline in productivity … in manufacturing as a whole.”
As people begin to curtail buying things due to inflation and a weakened economy, Potvin says it will affect shipping volumes.
“We expect freight volumes to, I wouldn't say dip, but level off, and maybe dip to a degree but not a large (degree),” he said. “I don't expect to see a deep recession or anything of that nature.”
In LTL, Kouts, Director of LTL at Trinity Logistics, says he sees carriers shifting to more consolidation for faster shipping and maintaining heightened service levels.
“On the LTL space, I see more carriers sort of looking at, not necessarily final mile, but more of a consolidation and redefining their role on a terminal-to-terminal basis to have faster service in that one- and two-day delivery point to increase those turnaround times for our customers,” he said. “Because right now, we've got a lot of consumers and shippers that went through that pandemic and there's some expectation of those service levels.”
Technology will be a critical component to effective shipping, especially with the carriers.
“We all use the same carriers, at least in LTL, so when FedEx is trying to set themselves apart from UPS or an SDS, what is what's going to set them apart rates and their service, but I look to see more advancement in that area, as well as the technology from the carriers”, said Kouts. “They've been heavily investing in personnel and their technology. We had a couple of carrier reps over the past year that told us they were placing several hundred orders for trailers and tractors that wouldn't be completed until 2023 or 2024, so they are ramping up their assets to be able to handle any capacity.”
To hear more about Trinity's forecast for the future of freight, visit https://www.banyantechnology.com/resource/episode-3-charting-the-future-of-freight-with-trinity-logistics.
All new episodes of Tire Tracks will be posted monthly on all major podcast channels including Spotify, Apple Podcasts, and Google Podcasts. Video versions of the podcast will be hosted on Banyan’s YouTube channel and the company’s website.
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