Ten Trends in Transportation and Logistics for 2014

1. Look for more mergers in the transportation software area. Trimble acquired People Net and TMW in 2011 and 2012.  Vista Equity Partners acquired Omni-Tracs and Roadnet in 2013. Look for more deals to happen in 2014.


2. TMS Cloud Computing will continue to grow. Shippers and 3PL’s love the cloud model. Mid to Large size shippers and 3PL’s will opt for private cloud environments.  Many will opt for optional disaster recovery secondary sites. While smaller shippers and 3Pl’s will utilize shared environments, cloud computing offers tremendous value and a way to significantly reduce IT costs.


3. Consolidation in the Courier business will occur. There are thousands of individuals who own small courier companies across the U.S. These company’s provide same day delivery of bank documents, pharma products, medical products and spare parts.  Many of the owners are successful small business owners and also aging baby boomers who are looking for the right opportunity to cash out.


4. Mcommerce will continue to grow with tablets and mobile device allowing consumers to shop on line.  The parcel companies (FedEx and UPS) will benefit. Most companies spend about 5% on shipping.  According to eMarketer- Mcommerce (mobile commence) will grow to $56.72 billion in 2014 from $41.68 billion in 2013. Source: emarketer September 2013.


5. Consolidation in the freight brokerage area will continue to occur.  Look for more mergers and acquisitions as the companies such as XPO attempt to gain scale. Also, more trucking companies will enter the field as logistics providers offering brokerage services. Cloud based TMS software based on a pay as you basis reduces one of the barriers to entry. The freight brokerage bond raised to $75,000 has forced some of the smaller companies out of the business.


6.  More companies will look at natural gas as an option for fuel whether it is LNG or CNG. Natural Gas is gaining interest as more fueling stations come online (1200 CNG stations includes public and private fueling depots and 150 LNP depots) and natural gas prices remain cheap compared to diesel.  Transportation companies with closed networks and who have their own fueling depots will be the first to make the investments in facilities and equipment.


7.  Big Data – data analysis will allow shippers, transportation and logistics companies the opportunity to better manage their business and make insightful decisions.  Transportation companies will be able to optimize routes, monitor drivers performance and monitor equipment for failures and patterns.


8. Regional parcel carriers will garner interest since UPS and FedEx could not keep up with the last minute demand for deliveries during the 2013 holiday season. However, regional carriers are small players and are focused on certain geographical areas. They do not have the resources (time, money, people, facilities and technology) to mount a challenge.  DHL was the last entrant and retreated in 2009.


9. Supply Chain Risk Analytics will draw interest from shippers and logistics providers. The ability to analyze and look at climate risk management is a new area. Major retailers will benefit from knowing the probable weather patterns. If the weather is projected to be colder and wet in the Northeast. Retailers may want to move winter clothing, snow blowers and generators well in advance to take advantage of inclement weather.


10. Driver capacity will remain tight as competition for drivers heats up and aging baby boomers retire. With the economy coming back some drivers may abandon their trucking careers and go back to manufacturing or construction jobs to stay at home.  Private fleet companies will have an advantage in driver recruitment and retention as drivers in this sector work regular schedules.

Check back with Logistics Trends Inc. for more insights into the transportation and logistics industry.  Our email address is jbisaha@logisticstrends.com and phone number is 770 639-2230.