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New Competitors will Shake Up Transportation Industry

Jan. 23, 2014
With freight levels coming back, a competitive gulf may form between carriers returning to bad habits and those that are evolving.

Some companies in the transport and logistics industry may have become complacent with comfortable feelings that their industry is back to "how it was," according to a semi-annual freight market perspective from CarrierDirect, a consultancy and sales company in the transport and logistics industry.  Such companies have gone back to the old models that made them successful while other companies—the ostensible new leaders in the industry—are implementing new plans for growth to outcompete their peers in the years ahead, the report states.

Some of the themes the authors of this report foresee in the years ahead include:

1. Enough GDP growth (between 2 and 3 percent) to keep trucks full, but not necessarily outpacing trucking companies' ability to invest in new assets or find drivers.

2. Blurring the lines between asset, asset-light and non-asset sectors, as carriers make meaningful steps into the brokerage space and both non-asset and asset-based companies look to asset-light models.

3. Brokerages getting larger—through organic and inorganic growth—and developing capabilities to service customers beyond singular modes and become more of a "one stop shop" solution.

4. The entrance of new "tech startups" who find creative ways on the asset and non-asset sectors to bring efficiency and value to companies beyond what existing technology vendors provide.

5. Asset-based and non-asset companies taking action on a few strategic priorities to avoid being left behind by competition (details inside the perspective).

"The market is going through an interesting transition out there; freight levels are back, but there's a separation between the companies returning to old bad habits and those that are evolving," said Joel Clum, executive vice president at CarrierDirect. "We're seeing the market being flooded with professional managers and investors from other industries, as well as some tech startups, who are bringing new ideas, technology and goals for innovation. The old way of doing things has ended and the companies who don't invest in their capabilities to compete in this era of 'new normal' will be left behind."

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