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|Owner Operator E-Commerce Opportunities & Challenges|
E-Commerce Brings Challenges and Opportunities to Owner-Operators Willing to Adapt
The steady growth in e-commerce continues to disrupt long-established transportation models. The shopping patterns of consumers in the U.S. today has changed radically. Consumers are increasingly choosing shorter delivery cycles, resulting in a number of challenges for truckers.
It’s not just consumer goods like clothing and electronics that are in demand from online sales. The e-commerce movement is changing the way many businesses receive their products. Consumers are just as likely to go online and order an item as they are to drive to a local store. E-commerce sales are taking larger shares of markets in almost every type of commodity – household goods, cosmetics, personal care items, groceries, furniture, auto parts – the list goes on and on.
Much of the direct impact of e-commerce is on package carriers such as FedEx and UPS. UPS, for example, projects that business-to-consumer parcels will make up more than half of their U.S. domestic shipments by 2019.
As e-commerce continues to grow, local retail stores will take a hit, with more brick-and-mortar stores closing down. The lack of physical locations will mean that the number of goods being shipped directly to consumers will increase, as will the cost of shipping and customers’ expectations.
In a recent study conducted by Sword & Sea Transport Advisors, 55 percent of consumers want same-day shipping, while 46 percent say they want next-day shipping. These expectations, in combination with an increased demand for free or low-cost shipping to the consumer, places more pressure on carriers.
Experts in the transportation industry recognize that the high demand for fast, low-cost deliveries means truckers need to find efficiencies. Gone are the days when drivers can wait until trucks are full before going on the road. In today’s e-commerce climate, drivers need to get items out to consumers whether or not they have a full load or not.
In the future, trucks will still need to deliver to smaller, dispersed locations. Goods will be stored closer to consumers to make delivery easier and faster. There will be fewer deliveries to big box or grocery stores. Warehousing will be configured differently.
The increase in online sales is likely to increase the demand for drivers. While there will be a reduction in the demand for long-haul shipping, the new model will be an increase in local or regional deliveries. Shipping costs will likely be picked up more by the retailer or the shipper, as opposed to the consumer.
Maximizing space and minimizing time on the road has always been the name of the game for long-haul trucking and owner operators, but now minutes and miles will be make or break issues. Drivers will need to utilize the latest technology to stay competitive. Drivers will need to stay current in the use of apps such as TruETA, which calculates an estimated time of arrival, taking into account real-time weather data, traffic, drivers’ stops, routing and hours of service regulations. Another app that will help drivers is Radar by BlackBerry. Radar helps match drivers and nearby trailers that have load space.
Carriers can expect packaging to change as well. Look for packages that are lighter, leaner, cheaper, and more environmentally conscious.
Truckers will need to adapt to the changes that e-commerce is bringing to the trucking industry. E-commerce is a rapidly growing marketplace that offers new opportunities for owner operators who take a proactive approach and get on board with new technology and delivery models.
AAOO gives owner operators and small fleets the tools they need to be successful. An AAOO membership gives truckers benefits, products and services to enrich their business and lifestyle. Contact us today to learn more.