The E-Commerce sector's fast-paced growth has dramatically impacted the trucking and logistics industries. Over the last two decades, E-Commerce has completely changed the customers' way of shopping. Instead of visiting stores and shops, customers now order almost everything online and get it delivered to their doorstep. With robust E-Commerce growth, brick-and-mortar stores are no longer the only way of shipping. Let's look at the statistical background of E-Commerce growth over the last two decades.
From 1999 to 2017, E-Commerce sales increased by 3000 percent, which shows massive growth. From 2017 to date, E-Commerce sales have consistently increased. The growth rate of E-Commerce shipping has increased by 13% to 16% over the last five years. E-Commerce is one of the few industries that haven't seen a decline due to the COVID-19 pandemic.
This sharp rise in the growth rate of E-Commerce has affected the trucking & logistics industry in both negative and positive ways. This article will summarize some of the significant impacts of E-Commerce growth on the transportation industry.
Impacts of E-Commerce growth on the transportation industry
- High shipping demand
The trucking industry serves as a transportation bridge between online retailers and customers. As more people shop online, it has increased shipping demands by many folds. Customers expect the delivery of their goods as soon as possible, which puts pressure on the truckers to ensure on-time delivery. E-Commerce transporters are forced to buy new trucking equipment and hire more truck drivers to meet the ever-growing shipping needs.
- Driver shortage
The rapid growth of E-Commerce has exacerbated the situation of the driver shortage. As E-Commerce grows, so does the demand for short-haul truck drivers, which causes driver shortage in the industry. According to a report from the DOT (Department of Transportation), the annual freight volume of the country is expected to go up to 29 billion tons, with an increase of 45% by 2040. E-Commerce is considered a significant contributor to this future surge in freight volume. The transportation companies will need to hire 51000 more truck drivers to meet the growing shipping needs.
- More employment opportunities
It's one of the positive impacts of E-Commerce growth on the logistics industry. Due to high shipping demands, transportation companies are creating more employment opportunities for driving jobs, warehouse jobs, freight brokerage, and freight dispatching positions for youth.
- Adoption of Technology, Digitalization, and Innovation
The rising need for workforce, labor, and resources has finally opened up the trucking and logistics industry to use new technologies and digitalization. Transportation companies now use TMSs (Transportation Management Systems) to digitalize all significant processes associated with freight shipping. For example, load booking and scheduling, which have been handled manually in the past, are now processed with digital tools. This adoption of technology and digitalization has helped the trucking and transportation industry to cope with everyday challenges.
- Focus on End-to-end visibility
The importance of end-to-end visibility of shipments has increased. Most transportation companies are now focusing on improving end-to-end visibility of shipments for customers by investing in a robust data-sharing system and real-time tracking software.