FTR: ‘Disruptions ‘Ahead’

Uncertainty over international trade – combined with impeding electronic logging device mandates as well as automation and on-demand servicing in the transportation industry – are the key potential disruptions which will shake up the North American Trucking industry.

During FTR’s most recent webinar on the key issues in transportation, Eric Starks, CEO & chairman of FTR Intelligence, and Larry Gross, transportation expert at FTR, noted the most significant trade disruption ahead that could impact freight flows for trucking and intermodal is NAFTA.

As reported by Fleet Owner:

“This is one of the areas that the Trump administration can make moves without a lot of congressional input or insight,” Gross explained. “We’ve seen some saber rattling in terms of NAFTA.”

He added that Trump’s threats to withdraw from or renegotiate NAFTA have already impacted cross-border moves between the U.S. and Canada and Mexico. “In general, we see a lot more downside in terms of disruption of cross-border trade rather than upside,” according to Gross.

“Right now NAFTA is our major concern,” Starks said. “Where Mexico and Canada are much more uneasy about things, the likelihood that things could change over the next several years is higher. What does that freight movement look like? It’s really hard to tell what that full impact is. That’s what we’re looking at closely now.”

A more long-term disruption is autonomous trucks, which depends mainly on the level of public acceptance over the next decade and fleets’ willingness to invest based on returned investment

Gross suggested that fully autonomous trucks are a long way off. In the meantime, the “gateway technology” is the platooning approach.

“This is a technology that can be adopted on a widespread basis purely on the fact of the fuel savings it generates. That’s enough to finance the technology.”

Starks said technology will begin pushing out intermediaries between financial transactions and services, perhaps radically changing how the industry behaves.

Much has been made of the “Uberization’ of freight, but Gross said he thinks it’s an overstatement to say that Uber is going to blow up trucking’s business model “because booking a load isn’t the same as booking a taxi.”

However, Starks did point out the final mile is probably one of the biggest problem the transportation industry has to deal with in next few decades.

“When looking at terms of productivity this is where fleets can have the biggest bang for their buck. We’re seeing different things happening with drones, and in some areas it makes sense to use some drones.”

“What is the most efficient way to get this good to our end customer,” he added. That technology is still in an evolutionary phase. That will evolve over time.”

Meanwhile, the rollout of ELDs has the ability to radically impact capacity, Starks explained. “The timing really matters there.”

Both Starks and Gross noted that we are still in a “wait-and-see” state as we look at the overall regulatory environment and what the priorities are in the new administration. With ELDs and the potential loss in productivity, Starks said there will be a push to get that productivity back, and fleets will likely start better optimizing technology and big data.

“Big data is only good if already know how to use the information you have,” Starks stressed. “If you don’t know how to use that information, big data won’t help you.”

Read full Fleet Owner article here.

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