The U.S. economy is in the midst of major shifts in the way consumers buy and receive goods, and some of the largest segments of the economy — such as prominent freight-producing sectors like the food and automobile industries — will be upended in the coming decades, said forecasters at the FTR Conference held in Indianapolis this week. These shifts will likely reshape the way freight moves in the U.S.
Thom Albrecht, president of Sword and Sea Transport Advisors, pointed to four radical changes in consumerism that could dramatically alter trucking industry operations, echoing some of the points made by economist Noel Perry on Wednesday at FTR, who predicts the trucking industry will face stiff freight challenges in the coming two decades due to economic shifts.
Albrecht spoke Thursday about economic disruptions and changing freight patterns, painting a picture of a near-future trucking industry that leans more heavily on less-than-truckload hauls, medium-duty straight trucks and vans, shorter routes and final-mile delivery. He predicts reefer to remain strong, despite shifts in reefer freight movement. Dry van, however, will see a decay in the coming years, he says.
A separate panel discussion Thursday made similar predictions, noting how online retail giant Amazon recalibrated consumers’ expectations, particularly for e-commerce and quick delivery.
E-commerce has already transformed the economy and truck freight. Online buying will continue to grow dramatically in the coming years, says Albrecht, as consumers increasingly turn to e-commerce to purchase household goods, furniture, personal items and even groceries.
On the flipside, traditional brick-and-mortar stores will continue to fall away. More than 6,000 stores have already been shuttered in 2017, says Albrecht, and 20 percent of existing stores are predicted to close over the next five to eight years.
Albrecht predicts another major segment of the economy, the automobile industry, to decline steadily in the coming years.U.S. auto production peaked at 18.2 million units last year, but it could dip to around 5 million as soon as 2030, Albrecht says, though forecasts range from a 2 million units in 2030 to 14 million.
Driving factors of the trend include urbanization, the so-called sharing economy, a weaker middle class and more reliable, and thus longer-lasting, automobiles, says Albrecht.
“Whatever the number is,” says Albrecht, there will be fewer loads for car haulers and fewer van and flatbed loads carrying raw materials and supplies to automobile manufacturing facilities.
The food hauling segment will also see major shifts, as American consumers opt for local restaurants over large chains and fresher ingredients over prepackaged groceries, says Albrecht. Online grocery buying is also at a precipice, which includes not only grocery delivery services but also meal kit providers like Blue Apron. Amazon’s recent purchase of Whole Foods will likely spur an even greater uptick in grocery delivery, Albrecht says.
These changes will impact reefer fleets, particularly those who serve restaurant chains. It also will prompt the need for smaller vehicles for final-mile delivery of groceries, as we as more localized food distribution centers to serve restaurants.