Transportation and Logistics Market Insights—The United States

Technological Advancements and Strong e-Commerce Growth will Drive Freight Demand and Warehouse Segment Growth
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Published: 12 Dec 2017

The US economy underwent lackluster growth in 2016 due to a sharp decline in the energy sector, reduced exports, and a drop in investment due to the appreciation of the Dollar. Expansionary fiscal policies, supported by a rise in public investment and tax cuts, are expected to boost the economy in 2018. A rise in wages is likely to offset the sluggish external demand and fuel economic growth through 2017. Road and rail remain the most utilized modes of transportation in the United States. Bulk goods account for almost half of the industry’s revenue. The challenges faced in terms of widening highways in urban areas have prompted discussions on a host of alternative measures to mitigate congestion. One of the alternatives encouraged by the DOT is the diversion of truck freight to rail and water. The Freight Development Plan, which includes strategies to address the bottlenecks in transportation systems, will focus on reducing congestion, improving freight safety, encouraging technology adoption, and boosting intermodal connectivity to increase efficiency and competitiveness. Logistics start-ups will play a key role in the freight transportation through the trucking segment due to the growing number of innovative online freight solutions. Modern warehouses are becoming automated with the application of robotic and wearables solutions, with a focus on improving efficiency. US warehousing rents are predicted to increase due to shortages of modern warehouses. Amazon is clearly making the largest e-Commerce impact. In a move to compete with Amazon, Walmart is investing heavily in the build-out of its e-Commerce fulfillment network. Automated cars, Uber for Trucks, and platooning will make a foray into logistics. Mobile tracking, biometrics, Big Data analytics, smart inventory management, real-time goods tracking, cloud computing, the Internet of Things, robotics, drones, and 3D printing are among the most prominent technological innovations.

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