The Trucking Industry and Economics

The Trucking Industry and Economics

Much can be said about the commercial transportation industry from a standard business point of view – how it can potentially be a direct limiting factor for profit if left un-optimized and vice versa. But, let’s take a look at where the commercial transportation industry stands today, and where it is headed in the future.

The global village we live in today reaps economic benefits from synergistic business transaction with goods and services within or across borders. The trucking industry alone is a fundamental one. Without it, there is no way to transport goods from the port or the wails to the warehouses and businesses.

Commercial logistics is very much dependent on the trucking industry, as they deliver raw materials to the manufacturing plants, and the manufactured product to the markets or warehouses. Due to its ubiquitous functionality by companies internationally, this industry has a lot of potential in the near future waiting to blow up. The global market for trucks weighing more than 6 tons reached €150 billion last year, and estimations show that the number will go up to €240, by 2025. Clearly, there is a lot of value in trucks already and a lot more to be added to it in future. Technology has already been integrated into trucking to a slight extent. Refrigerated, temperature controlled vehicles are available on rent, to safely carry your product while abiding by product specific protocol of heat labile substances, such as pharmaceuticals, meat, poultry, dairy etc.

However, some companies have already taken it up a notch. Amazon’s Prime Air is currently delivering parcels to shoppers within 30 minutes of placing the order. Uber and Mercedes have unveiled their self driving trucks that are capable of carrying gargantuan amounts of cargo weights. Mercedes eTruck is a fully electric vehicle, saving fuel cost and has 339 horsepower!

The trucking industry alone, hauls in about $140 billion in shipped goods per year. Trucking is a widespread source of employment too. Around 800,000 truck drivers exist in the US alone. Trucking unions exist to protect the interests of truckers, if they do decide to strike together; it can instantaneously halt all major business operations, delaying shipping cargo. The price of the items to be delivered would also skyrocket to account for the decreased supply to the consumer’s demand.

This powerful industry needs to be regulated in order to keep it from over proliferation. Federal and state laws are imposed for highway and roads, to ensure that trucks are driven on a lower speed limit, refrain from using certain roads, and have a well rested driver. These political influences are for the benefit of many of course, but indicate the booming potential of the trucking business to take over if left unregulated. The trucking industry is also responsible for 65% of the total value added on the product by transportation services.

Rental trucks like Frost Dubai Refrigerated Trucks LLC are responsible for 27% of this statistic which use protocol dictated handling and temperature controlled vans to deliver goods safely.

Sources

https://www.strategyand.pwc.com/trend/2017-commercial-transport-trends

http://smallbusiness.chron.com/importance-trucking-industry-71922.html

https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/transportation_statistics_newsletter/issue_04/entire.html

http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/delivering-change-the-transformation-of-commercial-transport-by-2025

http://www.thedrive.com/news/5283/mercedes-benzs-new-electric-truck-may-be-the-future-of-commercial-transportation