A recent article in freightwaves.com discussed the many challenges the trucking industry faces today. Citing the American Transportation Research Institute’s (ATRI) annual survey of carrier and commercial driver concerns, the article noted that the top concern was the uncertainty of the U.S. economy. This was followed by truck parking, fuel prices, driver shortage, driver compensation, lawsuit abuse reform, driver distraction, driver retention, detention/delay at customer facilities, and zero-emission vehicles.
What wasn’t on this list were the effects of the growth in e-commerce on truck fleets, especially those in the long-haul business. Obviously the pandemic played a huge role in the surge of online buying, but even with the pandemic gone, consumers have gotten used to buying online with close to immediate gratification in fulfillment. An NBC News article in April of 2022 discussed how this was impacting long-haul fleets, “As e-commerce creates additional demand for warehousing jobs and short-haul freight, long-haul trucking positions may become harder to fill.” The article also stated, “Long hours away from home and high turnover rates may lead truckers to seek employment elsewhere.” It also didn’t help that Walmart offered first-year drivers up to $110,000, doubling the industry average.
The impact of e-commerce on fleets
E-commerce has driven changes and disruptions in a number of ways; most of all, pressuring the trucking industry to meet the growing shipping needs of those e-commerce companies. Some of the impacts have positive outcomes (at least, in the long run), others are very disruptive. Other impacts include:
- Last-mile delivery – As customers expect faster and faster delivery, this concept has taken on greater importance. Much of the deliveries take place in urban areas, places where traffic congestion and a lack of street parking make for unique challenges for trucks and drivers.
- Efficiency and optimization – One of the positive impacts has been as a result of e-commerce companies looking for ways to optimize their supply chain while reducing shipping costs. Logistics technology, like route optimization, real-time tracking, and dynamic scheduling has played a major role in meeting customer demands and has proven to be a great tool for fleets overall.
- Flexibility/scalability – Just like brick-and-mortar stores, online stores have seasonal surges during holidays and sales events. This has put pressure on fleets to accommodate this ebb and flow in shipping volume; some carriers have lost business to on-demand models.
- Sustainability (ESG) – A big concern for businesses are the environmental, social, and governance regulations, now and in the future. Increasing short-haul business means more trucks on the road. Companies are looking towards electric and hybrid vehicles and alternative fuels to answer these concerns. That is easier, at this point, for smaller and mid-size vehicles.
- Labor shortages – As I noted above, long-haul fleets are competing with companies that offer a preferable lifestyle and more money. This has made the ongoing driver shortage even more difficult and pushed fleets towards offering better wages and benefits, not just to recruit but more important, to retain those qualified drivers.
- Fulfillment centers/warehousing – Instead of centralized fulfillment centers, the larger e-commerce operations have opened more localized (and thus, smaller) warehouses that are strategically located to reduce shipping times. More fulfillment centers require more trucks.
- Data, data, data – E-commerce companies and their supply chains have generated huge amounts of data. That data has, of course, been used by the companies themselves to better serve their customer base. However, trucking companies are also benefitting, using data and analytics to improve decision-making, optimize routes, and enhance customer experiences.
As online businesses grow, some will look to have their own private fleets. Since transportation is not the core of their business, the expenditures would be considerable with no guaranteed return. For these businesses, working with a full service leasing provider might make a great deal more sense. NationaLease would be a great resource for companies looking to have their own dedicated fleet minus the burden of ownership and ongoing maintenance.