Online sales have increased nearly 500 percent since 1995 and they continue to grow. In an online survey by the United Parcel Service, respondents said they bought more of their purchases online than they did in stores. Retailers continue to respond and are working to speed deliveries to consumers, which is having a significant effect on the trucking industry.
Today’s consumers are shopping 24 hours a day, 365 days a year, and have come to expect an always-on shopping experience, with many wanting free delivery and seamless return options.
Shorter Length of Haul
As a result of e-commerce, retailers and manufacturers are placing more distribution centers throughout the country so they can fulfill orders quickly. Bob Costello, senior vice president and chief economist at the American Trucking Associations, said that the increase in distribution centers is driving down the average length of haul, which today averages 533 miles. “That is a 33 percent decrease since 2000,” Costello said.
“Since 2000, people have started buying online, and brick and mortars have had to adjust to that,” he said. “They’ve built more distribution centers around the country, going from a handful to dozens, but they’ve gotten closer to the source.”
Add-On Service Requests
Shoppers are buying a wider variety of purchases online, and a number of trucking companies are adding white-glove delivery services to capture business. A survey by Accenture found that as online shopping increases, shippers are increasingly interested in on-site installation of purchases, such as appliances.
Greater Need for Tracking
Online shoppers have grown accustomed to tracking purchases and increasingly expect real-time information about their shipments. This has increased the amount of information shippers are requesting from carriers and, in turn, the use of telematics devices among carriers.
The Department of Transportation (DOT) has reported that growth in online shopping is increasing the amount of truck traffic on the nation’s highways. DOT projected that by 2040, freight volume in the U.S. will increase by 45 percent to 29 billion tons.
“Traffic to and from ports and other major freight centers can increase traffic on local roads and affect neighboring communities through noise and air pollution,” the report said. “These issues may become more challenging as online shopping increases the portion of deliveries that are made directly to consumers’ homes.”
Traffic creates challenges for carriers that need to keep products moving and make a specific delivery window. To mitigate problems, private fleets are utilizing route optimization software to identify the best routes and delivery schedules, as well as tracking technology to obtain real-time updates on vehicles’ locations.
Penske Truck Leasing can work with you to understand the challenges you may be facing as e-commerce changes the way you do business. Leasing may help you manage growth and thrive in a rapidly changing trucking industry.