Transport in 2019 and beyond: key factors influencing supply and demand

In view of scarce capacities and rising freight rates, which have dominated the headlines, 2018 was probably not as planned or expected, especially for many shippers. What are the key findings from last year, and what trends and factors should shippers keep in mind to ensure that they are able to respond effectively to what happens in the transport market over the coming weeks and months? These are the main questions that this Saloodo! article addresses.

A “new normal” in freight transport?

A strong economy from the end of 2017 to the end of 2018 meant that the demand for transport capacities significantly exceeded the supply of free freight space. There are many indications that the resulting rise in freight rates will remain the new normal for shippers for the time being. However, it should also be noted that the labour market figures show that more and more forces are coming into logistics and at the same time the growth rate of the economy has slowed – this will lead to a normalisation of the market in 2019.

Economic factors affecting transport in 2019

When the market begins to normalise, what factors should shippers consider when planning for 2019? Attempts to pre-empt a possible trade war with the US were the driving forces behind the surge in demand in 2018, and there is still a great deal of uncertainty about possible import tariffs to the US for many different European industries. However, there seems to be a small ceasefire now that could affect plans for the first quarter. Companies are currently reviewing their inventories and location to position themselves optimally for various potential economic outcomes.

Better data utilization

Something that can be seen in both the shipper and the transportation community: People are becoming more and more demanding when it comes to using technology to optimize their supply chains and get more out of existing fleets. They use data better to make decisions, and we move away from bazar-style negotiations between shippers and dispatchers to a real transport purchase where the service is booked at a price that is already transparent.

Other influencing factors are, of course, the development of interest rates, oil prices, consumer sentiment and purchasing behaviour. And we must not forget the disruptive factors that the enormous increase in e-commerce brings to freight transport.

Rethinking the labour market

An essential factor influencing the supply side of the equation is the availability of truck drivers. An important thing to keep in mind is that the potential uses of truck drivers are not limited to driving trucks for transport companies. In terms of personnel management, drivers must be regarded as “shared resources”, for example from warehousing, logistics, the construction industry and manufacturing. They can be used in different industries, which is why these industries compete for the common labour pool. To attract drivers, you must ask yourself: Are the jobs attractive? Is the pay competitive?

Another factor to consider is the demographic development of the labour pool. The generation of baby boomers is now gradually retiring. This is becoming an economic factor because we do not know how evenly the age group is distributed. If such a large group retires in economically weak times, we can make up for that, but in times of high demand there can be real problems.

Based on the analysis of trends and the assessment of the maturity and potential impact of new transport and logistics solutions, we have identified 5 key factors that will change transport and logistics over the next 5 years. To better understand the current situation and the future direction of the industry’s transformation, we have analyzed each of these 5 forces in detail, taking into account their driving trends and the maturity of the solutions emerging on the market as a response, and summarized our key observations. Click here to find out what 5 logistics trends you should look out for in 2019 and beyond.

Daniel Mahnken, one of the authors of the Saloodo! blog.

Daniel Mahnken

Daniel Mahnken is a Senior Corporate Communications Manager at Saloodo!. As a qualified journalist, writing is practically in his blood. After studying sports journalism, he wanted to become Germany's Next Sports Commentator, but then he discovered logistics and has been stuck with it ever since.

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