E-Commerce is Changing The Trucking Industry

Don't think, just click. The pandemic is over, but the e-commerce industry continues to grow, fueled by both online stores and Smartphone users. We have recently even seen Walmart surpass Amazon, in terms of e-commerce sales, as the company was up 12% in their latest quarter findings. Consumers are shifting the way they are spending and it impacts everyone. The trucking industry has long served as the backbone of trade, commerce, and transportation. With more consumers ditching brick-and-mortar stores for online shopping, how will this affect the trucking industry?E-commerce has impacted the trucking industry in both good and bad ways. We can also learn a lot from the trends we have seen develop in recent years, including information on wages, safety, and streamlining the shipping process.  

The Good

Technology can enhance safety and change the way we operate 

Technology and innovation is not just benefiting e-commerce, as it also allows for safer driving practices and more ways to reduce unnecessary driving and spending of fuel. Drivers can use technology to reduce unnecessary miles via routing, find fuel stops nearby and even have better safety systems installed in vehicles. It has become easier to avoid accidents thanks to technological shifts taking place, and we are going to see more positive impacts on data and driving, including artificial intelligence (AI) use and even development of autonomous vehicles, which will shape the industry in years to come. Technology can simplify and speed up the process of getting from A to B.

Short-haul trips, increased driver demand 

Competition in the industry is resulting in a demand for more distribution centers in closer proximity to consumer and retail company. E-commerce benefits the trucking industry because it allows for shorter and more centralized trips to become available to more drivers. Fulfillment centers and warehouses are being built to keep up with demand, and the development will have locations in key areas, which allows truckers to fill the transportation need. While this may result in less long-haul drivers, this is especially appealing to a new generation of drivers. Drivers get to spend more time at home and are less likely to drive fatigued.

If the demand for e-commerce continues, we may also see an increase in the number of overall available jobs for truck drivers. Larger retailers may increase their fleet, but also have a chance to contract their business to trucking companies.

Increased need leads to increased wages

We’ve already seen the impacts of driver shortages in the last few years, which is leading companies to consider adaptation. One solution for driver shortages may be to increase wages, and we’ve seen this occur with Walmart offering jobs paying more than the average yearly pay to truck drivers recently, up to $110,000 to new drivers and more for tenured ones.

The Bad

Increased pressures due to shorter delivery windows 

While we have more demand, there is also added stress placed on drivers and companies to meet the heavy demand. Delivery windows are compressing due to increased competition, and carriers now have to fight to deliver on time, regardless of weather, or they may lose the retailer’s business, face fines and not to mention put themselves at risk.

It is essential to the success of carriers to have fleets which are driven by qualified individuals and reliable in terms of transportation needs. Promise of a faster delivery time, a direct result of an e-commerce boom and intense competition, puts pressure on truck drivers to drive in shorter time, which can lead to fatigue and even HOS (Hours of Service) violations. Drivers can get burnt out quicker and lose focus under a lot of pressure. 

Lower shipping cost increases competition 

Lower shipping costs resulting from the competitive market also means that smaller trucking companies may not be able to compete with large shippers like Fedex, Amazon and UPS. Since the retailer companies bare the shipping cost, they will have to make up for the financials in another area, and smaller trucking companies may be driven out of business, due to the shipping cost changes. 

Environment, truck and infrastructure issues 

Fast turnaround and increase in ordering can also put pressure on urban roads and infrastructure. Having more semi-trucks in congested traffic, or on roads which are already damaged, can impact both the truck performance, such as the brakes, and infrastructure negatively. Electric trucks will still take a long time to come into rotation, so this pressure may have a negative effect on the environment and urban areas.

What’s next?

Consumer spending may be outpacing the trucking industry’s ability to bring in qualified drivers and technicians, but this could be a positive trigger to raising truck driver wages and paying drivers more for their hard work and sacrifices. Some of the top issues drivers face could actually be positively addressed through this rise in e-commerce. Trucking industry rates increase when demand is up. Local hauls open up job opportunities for young drivers and increase retention via the wage and benefit increases. Consistent demand for goods also means consistent loads available.

The most effective way to keep up would be for the trucking industry to take advantage of the technology based, collaborative network. Zipments.io is the first collaborative platform facilitating streamlined communication and data between drivers, companies and brokers; allowing for greater control, visibility and efficiency. Companies and drivers can access relevant Carrier Code applications, track PARS/PAPS, generate customs invoices and access real-time data to ensure a smoother, safer and quicker transportation process. 

Adapting to industry demands is made easier through the use of technology. Platforms like Zipments offer greater visibility between drivers, brokers and shippers, giving truck drivers more autonomy over their work and a chance to keep up with the industry shifts. This especially benefits cross-border carriers and truck drivers, as the complex and tedious process is simplified using the platform.

While we are not sure if the e-commerce trends are a sign of the apocalypse or what, one thing is for sure: trucking companies can take advantage of digital technology, as it presents major opportunities in the industry.