In recent years, the market demand for dry van freight transport has been quite robust in nature. During the pandemic, consumers were unable to access products and goods in traditional ways. This led to a natural shift toward e-commerce purchasing, which fueled significant growth in the dry van freight market. Specific goods like electronics, clothing, and many food products require dry van transport. And delivery of these items to households during the pandemic increased substantially. But as things gradually return to normal in this post-pandemic world, the dry van freight industry is experiencing conflicting pressures. From Fratogo’s perspective, it’s important to examine these in order to anticipate future trends.
Post-Pandemic E-Commerce Trends
In looking at e-commerce trends during and after the pandemic, there appears to be an ongoing evolution. Without question, lockdowns encouraged consumers to adopt online purchasing habits. With this came some changes in consumer expectations, especially related to product deliveries. Next-day delivery options became the norm for many, with nearly all expecting fast, efficient delivery services. This included deliveries provided by dry van freight transport. While the e-commerce volumes aren’t quite as large as they were at the height of the pandemic, they remain significant. As a result, ongoing e-commerce sales and consumer demand are expected to drive the ongoing growth of the dry van freight industry. Based on Fratogo’s analysis, this represents a key strength for dry van freight transport’s future.
National Economic Pressures
While the pandemic convinced consumers to buy more online, other pressures have cooled their buying tendencies. Specifically, inflationary pressures and threats of a recession have meant a recent reduction in consumer spending. Though the U.S. is technically not in a recession per se, prices of goods as well as interest rates have certainly climbed. This means that consumers have less discretionary income to spend, placing downward pressure on dry van freight transport needs. In examining economic trends moving forward, it’s likely that a down economic climate will persist for at least the next year. But at the same time, the degree of impact that these changes have made has not been overwhelming. From Fratogo’s perspective, other factors will be more influential on the dry van freight industry than these economic ones.
Dry Van Labor Shortages
In addition to unfavorable economic shifts, the dry van freight industry faces other challenges looking ahead. For the past few years, driver shortages in dry van freight transport have been problematic. With a reduced labor pool, freight companies have been forced to compete for talent. This has led to the industry offering a higher average wage to drivers. As a result, companies have the option of either being less profitable or passing along these wage increases to clients. In both instances, labor shortages could negatively affect the dry van market financially unless changes are pursued. One of the changes that should be considered involves automation and self-driving technologies. Though these may represent longer-term solutions, they nonetheless will also support industry growth over the next decade. Thus, the net effect of these trends over the next several years depends on how freight systems approach current labor shortages. Fratogo sees this as a major turning point for the industry in the coming years.
Emerging Opportunities
Economic and labor pressures might slow the recent explosion of growth for the dry van freight industry. However, it’s unlikely these will have lasting effects. In fact, there are a few emerging opportunities that could stimulate growth in the next few years. One relates to rising consumer expectations regarding delivery efficiencies. Smaller and more specialized dry van freight transport options could enhance last-mile delivery solutions. At the same time, enhanced energy efficiency and sustainability measures also provide new opportunities. Electric and hybrid dry van transit vehicles could reduce costs as well as protect the environment. In the balance, Fratogo suspects immediate pressures might slow the growth of the dry van freight market in the near term. But over the long haul (pun intended), expect dry van freight transport to continue its upward trajectory.