Is Digitization Driving LTL Growth? Here's a Glance at the Market

If you're wondering what's up with this digitization thing, you're not alone.  The transformation is impacting virtually every industry, including shipping.  We're seeing changes that will not only impact our current situation, but long into the future.  One change that is here to stay is the trend towards ship-to-home options.  Here's a quick look at how this trend is helping drive LTL growth in the market.

Is Digitization Driving LTL Growth?  Here's a Glance at the Market

There are a few trends that could be pushing growth in the LTL market.  One is the more customer-focused approach to doing business.  Though the old adage of "the customer is always right" still applies, companies that have taken advantage of the disruption in the market to compete with traditional retail business models.  When online giants such as Amazon began offering two-day shipping, consumers started getting used to the concept that they could order any number of items and have them within a couple days, rather than being stuck with whatever selection was available at the local store.  To remain competitive, traditional retailers, such as Walmart, have begun offering a larger selection of goods online that can be quickly shipped to home, including large items such as appliances and furniture that are shipped by truck, making the last mile opportunities in LTL trucking that much more promising.

Another aspect of digitization that may be impacting the LTL sector is the push towards improved agility in operations so that manufacturers can adapt more quickly to changing market conditions.  Not that long ago, a manufacturer could count on having up to a year to enjoy their place in the market before a competitor could develop their own product to take part of their market share.  Because computer modeling and analytics allow a much faster time from concept to going live, manufacturers need to be prepared to change gears in their production line much more quickly than in the past.  This has led to smaller shipments from manufacturers to retailers.

There's a third aspect of digitization that also comes into play, which involves streamlining the supply chain.  After being stuck in the last recession with large amounts of stock that they couldn't sell, retailers have stepped back from keeping huge amounts of stock in a back warehouse in favor of just-in-time logistics.  Though this does cause issues on occasion with empty shelves, it's preferable to losing value on stock that sits on the shelves.  Because they don't want to be caught with a lot of extra stock that may not sell or will need to be significantly discounted, they are placing smaller orders to prevent that possibility.  This is another aspect of digitization that is driving up the LTL market.

If your business is being driven in a different direction due to digitization and changes in your market, it may be time to look at different options to handle your logistics and shipping needs.  Should you find that you need to explore some of these options, whatever your specialty shipping needs are, Road Scholar Transport can help.  Please feel free to contact us today for further details.