With a strong wave of rebalancing triggering the freight growth in 2017, things are looking optimistic for freight business. We are looking forward to a socio-political situation which is inclined to increase the investment in the infrastructure with decisive policies in the pipeline with NAFTA. Regulatory steps such as ELD mandate are going to be in practice from 2017. Freight management software, which is majorly developed to utilize and fix the spot rates to transport the freight as fast as possible are predicted to see a contrasting picture in terms of shipping rates and overall spot rates in 2017.

We are discussing few key trends which are the propellers of the changed statistics observed by the freight management software in the later half of the year 2016. We are also trying to figure out that for how long these trends are going to impart their effect and more importantly, what kind of these effects will be.

Green freight

One of the best things to see in freight business is the growing emphasis on adopting the lesser emission producing ways for transportation. The emphasis is not only led by small or mid-level transporters but also supported by large retail giants such as Walmart. It is a welcome effort especially in the time when e-commerce boom and growing competitiveness in the logistics segment could have shifted the focus on becoming profitable. But if you take a closer look, it has shifted the focus of the companies to become more profitable. Apparently, the ways of transportation which are “Greener” in terms of emission and production of carbon footprints are also the ways which are much more efficient in the supply chain. Hence it is becoming profitable for the companies to adopt the green logistics and get dual benefits in business with higher productivity and subsidized advantages from the government.

Special concerns are drawn towards the inclusion of zero-emission trucks and vehicles for transportation in port cities and major pick up and dropping points. Hydrogen fueled zero emission trucks, slower steaming and low sulfur content in fuels are few methods which have helped in reduction of harmful air pollution up to 30%. But apart from equipment, on the operational front, ways such as employing scrubber technology to reduce nitrous and sulfur oxide emissions more than 85% has yielded some positive and promising results.

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Freight picking up

Freight industry got to celebrate for the first time in a while when the volume comparisons turned in the positive side of the scale in August 2016. The upward trend started from May 2016 and eventually, from August things started looking clearer and encouraging with dependable spot rates. Hence, more or less 2017 is seen as the year of resurrection for the freight industry with major freight centers strapping up to overcome the grim effects of Hanjin bankruptcy and freight recession. The later half of 2016 culminated in the economic growth of 3% with the added positive effects from declining unemployment and increasing employee wages, it is obvious that the transporters are eager to see the trend to continue in 2017 too.

And so far, all the circumstances are conducive for the freight management software to anticipate growth trend in the freight business. Trump government have shown clear stand on higher spending on infrastructure, ELD mandate is set to be implemented by the end of 2017 and due economic measures are rolling out to stimulate the logistics business. As the political-economic and regulatory measures start showing their due impact on the business, motor carrier rates are due for a rise in 2017.

Ocean freight

Drewry Benchmarking Club Contract Rate Index, as reportedly projected 10-20% rise in the shipping cost in 2017. With the observed average rise of around 3% in the contract rates for Asia-pacific and Trans-Pacific routes in the last quarter of 2016, with analysis from freight management software, the prediction seems to be nearer to the truth than anything. This is a resurrection phase after the dip in the third quarter of 2016 which was caused by the ripple effects of Hanjin port bankruptcy but the future looks brighter in this case.

Even the shippers are unanimous on confirming the increase in the shipping cost. Though the prediction may vary on a larger scale. Around 46% of the shippers surveyed by JOC confirms that there will be 1-10% rise in contract pricing in 2017, whereas for the same period 20% suggested the rise as high as 10-20%.

The other significant impact will be made by a combined decision of OPEC and non-OPEC members to curb the oil production. Though the ocean freight has few carriers operating on solar and non-emission technologies, we cannot deny the dependency on crude oil. With lesser oil production the supply is bound to decrease increasing the fuel price in return. Therefore, an increase in the bunker rates is also expected.

Drewry Benchmarking Club Contract Rate Index, as reportedly projected 10-20% rise in the shipping…
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Intermodal Rail Transportation

One of the most interesting and unexpected trends is seen with the rise of intermodal rail transportation. Though the pickup and delivery are still done by trucks the rail mode is utilized for long hauls. With this minor tweak, this way of transportation is able to save 60% on cost as compared to a supply chain which is fully operated on trucks. The other major benefit is the reduction of emissions which can go up to 66%. Though e-commerce sector is raging for faster delivery but with decentralization of distribution centers, the transporters are leveraging the flexibility achieved on the timeline to adopt to rail transportation which is slower yet more efficient and profitable to increase profit. It makes sense to streamline and improve last-mile deliveries in these cases and utilize higher ROI ways for the initial stages of the supply chain. Therefore, we are hoping that freight management software will see an increase in intermodal rail transportation for freight delivery in 2017.  

These were few of the interesting trends we that are predicted to impart their due effect on the freight industry in 2017. From a business point of view, it gives any logistics company a leverage to act faster and in the right direction if they are aware of the upcoming trends in their domain. Freight management software is not only easing the present operations for shipping companies, they are also clearing the mist from future for the companies by acquiring key actionable insights from their operations. This is the reason Dreamorbit is helping out its clients to utilize some of the best predictive analysis tools for business intelligence to develop a dependable freight management software. The aim is to manage freight as well as future confidently.  

About DreamOrbit:

DreamOrbit is a Logistics and Supply Chain Technology Development company. We have been creating meaningful and reliable software products for the industry which is “Always on the go” for the past half decade. We are highly motivated team aimed at innovation. Our philosophy is to “keep challenging the potential within”.  With the support of our happy customers and dedicated team, we strive to provide best possible solutions to industry problems. Visit our website to know more about DreamOrbit.

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