The transportation and logistics industry is evolving at breakneck speed, and keeping up has never been more important. That is why the 28th Annual Study on Trends and Issues in Logistics and Transportation is more important than ever.
As one of the longest running research studies in the industry, the annual report examines various trends, including budget expenditures by mode, performance metrics by mode, domestic and international supply chain visibility and primary tools and methods used to manage transportation and distribution.
Over the years, study respondents have represented 15 different industry sectors, ranging from retail to food. The survey’s core group of respondents have historically represented the manufacturing sector, but transportation providers have been more active over the past several years.
This increase in participation has led to a better understanding of transportation providers’ perspectives, allowing a comparative group analysis to shippers, according to the researchers working on the study.
The annual study’s research team includes Mary C. Holcomb, professor, University of Tennessee; Karl B. Manrodt, professor, Georgia College and State University; and Christoper A. Boone, assistant professor, Mississippi State University.
The longevity of the study, combined with the variability of participants, enables it to provide a multi-year comparison useful for tracking both long-term and short-term trends seen throughout the industry.
FreightWaves Director of Freight Market Intelligence Zach Strickland hypothesized that trends picked up in this year’s survey will be characterized by oversupply and slowing demand on the transportation provider side of things.
“The overheated 2017-18 freight markets created a short-term bubble in the transportation sector. Too many players entered the sector or expanded to meet an unsustainable demand,” Strickland said. “With demand continuing to slow, carriers are feeling the burden of added costs in an environment in which downward rate pressure has pushed revenue below cost.”
Without a significant event such as a hurricane or other infrastructure-damaging event, Strickland said the retail sector will be what drives much of the growth in the sector.
“Much of the capital goods investment in 2018 was driven by tax break incentives as companies could realize accelerated depreciation. This led to a short-term increase in spending on goods prior to being needed,” he said. “This will take another eight months to a year to cycle out of the system as demand depletes inventories. The massive pull-forward of international shipments due to worries over the increase in tariffs and the unstable geo-political situation between the U.S. and China contributed to elevated inventory levels as well.”
This year’s study, dubbed “Supply Chain Digital Transformation: Springing Forward or Spinning in Circles,” will also focus on the processes shippers and carriers are using to digitize their supply chains.
The consistent emergence of new technological products in the transportation and logistics space suggests that there is still significant demand for these tools in the market.
“Last year’s study results suggested that while shippers and carriers are assessing new technologies to better manage operations both internally and with external supply chain partners, new tools and technology alone will not facilitate the changes that are needed,” according to a news release from the study’s research team.