2017 A Year in Review: Transportation Disruption

Year in Review2017 was a year of disruption for the transportation and supply chain industry. There were many factors that contributed to the volatility of the industry, but in this article, we will focus on four:

1. Continued Growth of E-commerce
2. The New ELD Mandate
3. Dangerous Weather Conditions
4. Increased Growth in the Economy

By looking backward at 2017, we can perhaps catch a glimpse of what to expect in 2018. If you are unsure of how to improve your supply chain operations in the new year, please give LTX a call. We would love to answer any questions you may have.


Continued Growth of E-commerce

We have discussed the rise of e-commerce extensively in previous blogs, however, this saturation does not diminish its importance. E-commerce growth is still perhaps the most important trend in the global marketplace. Since 2013, E-commerce has grown at an average clip of 14% every year. As E-commerce increases in its prominence, so do its needs for the transportation industry. For example, the rise of e-commerce has created an explosion in demand for last mile delivery and logistics. This new demand segment provides new and lucrative streams of additional revenue. Firms who can poise themselves to better capture this new area of demand can provide themselves with better opportunities to increase their profits and market share.


New ELD Mandate

The new ELD mandate has just come into effect this past December. There was a lot of confusion and borderline panic surrounding the new regulations, however, the real impacts are still being understood. The ELD mandate is designed to reduce costs by eliminating excess paperwork and increase driver safety by imposing limits on driving hours. Experts are split on how the mandate will impact productivity, some saying the reduction of paperwork will offset the reduced hours, while others claim that total production will drop by 3-5%. If you are still concerned about the ramifications of the ELD mandate, a good strategy is to pair with a reputable 3PL such as LTX. At LTX, your peace of mind is our primary objective, and we would love to work with you on all your shipping/transportation needs.


Dangerous Weather Conditions

2017 experienced a lot of inclement weather. Hurricanes such as Harvey and Irma did substantial damage to many cities (Such as Houston), transportation hubs, and supply chains. This level of damage forced many businesses to rapidly adapt their operations as well as rethink their overall supply chain structure. Extreme weather is by its very nature, unpredictable, so it is extremely difficult to properly forecast and protect your supply chain from disruptions. One way to implement protections is to build redundancy through alternate routes and multiple providers within your supply chain. This mitigates the risk of downtime by providing backups in case a segment of your supply chain operations becomes inoperable. It can be difficult to pinpoint the areas to add these protections. A good 3PL such as LTX can help point you in the right direction. We can analyze aspects of your supply chain and identify the areas vulnerable to weather disruptions. We can go even further and recommend ways to implement specific protections to ensure your peace of mind.


Increased Growth in the Economy

Right now, the United States’ economy has experienced the greatest amount of growth in more than a decade. U.S GDP has grown at over 3% over the last few quarters. This growth has created a boom in the demand for freight transportation. Freight volume is up in 2017 from 2016, and this growth is expected to continue into 2018. When businesses are doing well, the freight industry tends to follow. Firms who can take advantage of growing freight demand can make substantial strides in improving their bottom-line.

2017 has come and gone, but it is important to analyze the past to gain insight into the future. 2017 was a wild year in the freight industry, and it would be wise to assume 2018 will be similar. One way in which you can better prepare for 2018 is to partner with LTX. Our team of experts has over 100 years of combined industry experience. We have both the knowledge and technology to fulfill all your shipping and supply chain needs. If you would like to take the next step and revolutionize your supply chain, then please contact us today.