Emerging Trends and Challenges for Major Sectors of the Transportation Industry

The transportation industry is one of the fastest-growing markets in the global economy due to an increase in demand, mainly because of the rapid growth of urbanization. The UN predicts 68% of the world population is projected to live in urban areas by 2050. This increased urbanization helped the trucking industry alone move USD 11.84 billion tons of freight last year, amounting to USD 772 billion worth of freight.

The growth of the transportation industry across its numerous sectors is expected to see consistent growth over the next five years due to emerging trends that will shape the sector in the future. For example, the growing adoption of digital and data technologies in the freight trucking market is driving great potential for industries such as the global freight train market, worth USD 247.39 billion, growing at a CAGR of 2% by 2026. The growth of the transportation industry is also promising due to its high-performing sectors. The global transportation industry is predicted to grow at a CAGR of 3.4%  through 2027, reaching a value of USD 7.8 trillion by 2027.

Despite these favourable forecasts which promise future growth of many sectors, there are plenty of challenges ahead for the transportation and warehousing industries. The impact of COVID-19 led to slight stagnation of growth rates, as pre-pandemic growth rates for the transportation industry were at 19.8%.

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In the following article, we will elaborate on some of the major trends and challenges expected to impact various sectors of the transportation industry. 

What is the transportation industry?

Before we dive into the future trends and challenges of the transportation industry, it is important to define the industry. BizVibe’s platform contains more than 120,000 transportation and warehousing companies which are segmented into 29 categories. Each of these categories belongs to major transportation sectors such as general freight trucking, air transportation, rail transportation, and deep-sea freight transportation.

Each category is being transformed by its own set of trends and challenges that will greatly influence the direction of the transportation companies in the coming years. Below we will discuss the trends and challenges of categories across the major transportation sectors.

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General Freight Trucking Industry

Emerging Trend – Adoption of Technology to Improve Logistics

Companies are using technologies such as AI, IoT, machine learning, and blockchain to gain competitive advantages and real-time freight monitoring. The growing adoption of digital and data technologies in the freight trucking market is encouraging technology companies to develop and launch targeted products and services for the freight market.

Major Challenge – Shortage of Drivers

An aging workforce, low industry margins, and the high cost of training are causing a shortage of drivers in the trucking and heavy goods vehicle industry. Covid-19 and local factors such as Brexit have further complicated the phenomenon and brought about a crisis-like situation in several regions.

Warehousing and Storage Industry

Emerging Trend – Growing Adoption of On-Demand Warehousing

On-demand warehousing is an online marketplace that allows customers to access shared warehousing, fulfillment, and logistics services on a pay-per-use basis. The concept enables warehouse owners to improve the utilization of their assets and at the same time offers end-users flexibility when demand can be uncertain and budgets are constrained. Increasing demand for warehouses and an impending shortage of warehousing space are key drivers in the growing adoption of on-demand warehousing.

Major Challenge – Rise in Labor Cost

With margins always under threat from competition and other external forces, industry players are also struggling with rising labor costs. The rise in minimum and average wages due to government or competitive push are impacting the cost operators have to incur in securing even low-skilled jobs. The pinch is more prominent for operators who have a higher proportion of permanent staff.

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Scheduled Air Transportation Industry

Emerging Trend – Demand for Air Cargo Owing to Growth of E-Commerce

The global e-commerce growth and fast delivery is driving the demand for air cargo. Barring the exception of COVID-19 related disruptions in operations, the demand for air cargo is expected to gain considerable support from e-commerce and offset some of the lost revenue due to the pandemic outbreak

Major Challenge – Volatility of Fuel Prices

Jet fuel prices have been volatile in the last year. A very sharp decline in the first half of 2020 was experienced as a result of the coronavirus outbreak. As prices started recovering after May 2020, a weak air travel outlook has again created uncertainty on demand-supply dynamics. The sudden increase or decrease in fuel prices is making it difficult to ascertain price and volume levels that are ideal to lock in the fuel contracts for the future.

Transportation Industry Companies on BizVibe

BizVibe’s platform contains more than 120,000 transportation company profiles which are free to view. Each profile consists of in-depth company insights, comprising 50+ data points, including full industry trend and challenge analysis for 29 transportation categories.

BizVibe company insights help provide answers to questions such as:

✓ How will industry challenges impact specific geographic regions?

✓ Which regions will emerging trends be the most prominent?

✓ What are a company’s major product and service offerings?

✓ Who are the company’s key executives and what are their roles?

✓ How is a company positioned financially?

✓ Who are the company’s major competitors?

✓ What is the risk level of doing business with a given company?

✓ What is the latest company news?

Additionally, BizVibe enables users to connect with transportation companies and includes a feature which allows companies to send and respond to RFI/RFPs directly on the platform. There are transportation profiles of companies from over 200 countries on BizVibe. Accessing these profiles to discover, analyze, and connect with transportation companies is free to use.

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Transportation Companies in Canada

Transportation Companies in the USA

Transportation Companies in China

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