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4 Challenges Facing the Transport and Logistics Industry in 2018

    Challenges Facing the Transport and Logistics Industry

    The transport and logistics industry faces some interesting challenges in 2018. Some are perennial and familiar, while others are more representative of modern technological developments and the relatively unique political climate we’re currently experiencing (i.e. Brexit).

    This article gives an overview of some of the more pressing challenges, along with top- level ideas on how you can be prepared.

    1. Semi-electric trucks.

    In February this year, DHL, one of the largest logistics firms in the world, spoke of the predicted benefits of Tesla semi-electric trucks. Potential savings of “tens of thousands of dollars a year” were mentioned along with payback “within a year-and-a-half”, and lower fleet maintenance costs.

     

    A Tesla Semi electric truck could save us ‘tens of thousands of dollars a year’, says DHL https://t.co/vcXmXtzoCE pic.twitter.com/Heo8DOXjxN

    — Electrek.Co (@ElectrekCo) 23 February 2018

     

    Though this is only one opinion, the fact that it comes from one of the largest players in the industry could be indicative of a large upcoming shift away from traditional fuels, and perhaps even away from traditionally driven trucks: Tesla trucks have self-driving capabilities, and founder Elon Musk said recently that “every truck we sell has autopilot as standard”.

    Will reduced operating costs, positive sustainability implications, self-driving capability, and the ability to travel 500 miles between charges while fully laden be enough to lure the industry away from its current preferred vehicles? Only time will tell, but we recommend keeping up to date with developments so you don’t get left behind.

    2. Self-driving trucks.

    In the 2017 annual survey carried out by truck routing software specialists Paragon Software Systems, over half of respondents stated that self-driving vehicles were “not appropriate for the UK road network” or were “simply too far in the future to form an opinion”. Both of these points may soon be proven wrong.

     Challenging the claim that they are inappropriate for the UK road network is the recent investment of £8.1m by the British government to fund testing of self-driving vehicles on UK roads, a move in accordance with former chancellor George Osborne’s comment that such technology will be necessary to “put Britain in the fast lane” (pun, presumably, intended).

    The claim that the technology is too far in the future to require thinking about is challenged in part by the previous points about Tesla’s semi-electric trucks: if these become more commonplace and are fitted with autopilot as standard, it seems unlikely that transport and logistics companies would elect to not take advantage of the technology. 

    3. Planning pressures.

    Further demands on the transport and logistics industry arise from the continued increase in online shopping, and the accompanying expectation for quick delivery (87% of online shoppers consider a quick delivery time to be one of the main factors when deciding whether to make a purchase).

    More accurate and narrow delivery time slots are expected, along with the ability to track a package at every step of the delivery process. Each of these points requires more sophisticated software and operations, along with more diligence from drivers and more incentives to motivate this.

    4. Brexit.  

    Unlike other industries, Brexit is perceived as having a relatively low impact on businesses in the transport and logistics industry. In the Paragon Software Systems survey mentioned earlier, just 2% chose our impending departure from the EU as the single biggest challenge facing their business, the lowest voted challenge from a list of 9:

    • driver & skills shortage - 46%
    • rising transport costs - 13%
    • 'other' (no further information given) - 9%
    • congestion - 7%
    • lack of investment - 7%
    • urban transport restrictions - 6%
    • political uncertainty - 4%
    • reducing environmental image - 4%
    • Brexit - 2%

    That said, the Freight Transport Association predicts many potential challengeschanges. New tariffs on imports and exports may drastically change the cost of operating within the EU, for example. International hauliers may have to learn two sets of rules, one for when they are in the UK and another in the EU; and further red tape may be created by newly required documentation. It may be that people within the industry feel prepared for these challenges, or there may be a misunderstanding of how serious they could become.

    No matter your view on Brexit, it is well worth keeping abreast of the implications for the transport and logistics industry to make sure your organisation does not get caught short by any changes.

    While new and old challenges facing the transport and logistics exist, solutions exist too. Alternative finance is a reliable way to surmount these challenges and ensure your business is set up to succeed. Whether this is to invest in new equipment to future-proof your fleet, to implement new software to streamline the efficiency of your business, or to bring your business in line with new legislation, we can help you find a solution that fits your needs.

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