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ECommerce Boom Set to Drive the U.S. Freight Industry Renaissance in 2013

11 Feb 2013

“Fast growing E-commerce market in the U.S seems to be making large impacts on the demand of warehousing and freight shipping services.”

2012 has proved to be an extremely decisive year for businesses or corporations. E-commerce surge captured the headlines throughout the year. In addition, some major political and economical changes took place that affected logistics companies by large. More businesses required high-end industrial space to accommodate logistics systems in the last year.

Online Shops Changing the Landscape of American Freight Industry

Over one third of warehousing and shipping box demand in the U.S in 2012 was generated by online retailers. E-shopping is growing at a much faster pace than conventional retail business. Consumers are changing their buying patterns from bricks and mortar shops to e-outlets.

Retailers have realized the significance of web presence and thus they are investing more on online marketing campaign instead of expanding their landed property footprints. The online clicks have enforced the retailers to develop an entirely new business model that keeps their eCommerce website at the center.

Considering the ease of building e-store and its outcomes, a lot of fresh faces have jumped into eCommerce businesses. Such retailers don’t have a sophisticated real estate property to meet their warehousing needs; they require space with a 36-foot ceiling heights to house exclusive racking systems.

While shopping online, most of the consumers look for the fast-delivery option. The majority of e-retailers today guarantee delivery on next-day or within 24 hours, within the country. If the buyer is from another country, it may take longer, around 15 days. Now, this is when the trucking freight services come on the scene.

E-commerce sector is expected to grow at an annual rate of 11.5% and m-commerce (mobile web) at an annual rate of 48 percent. The American Trucking Association (ATA) has recently announced that the freight volume will increase by 24% by 2022 generating 66% more revenues for trucking freight industry. According to the experts, trucking services will continue to dominate the freight shipping industry in terms of revenues and freight volume.

Other factors that will make their impact on American freight industry in 2013:

  • The expansion plans of Norfolk Southern that extends from New Orleans to New York and CSX’s National Gateway development to allow double-stacked containers reach their logistics centers in Ohio and Pennsylvania will bring a surge in demand of logistics solution provider companies in the country.

  • The surging global demand of coal, power and energy sector will also make positive impacts on the freight shipping industry of the U.S.

  • Increased intermodal shipment volume (average 8% per year), growth in factory production (average 3% per year), and expansion plan of some major manufacturing units in store for 2013

  • Tremendous boost in the import and export orders is another key factor affecting freight shipping service provider companies of the country.

While industry expects truck freight movement will double in the coming years in the U.S, many logistics companies have announced their expansion plan in 2013 by hiring more freight broker agents, freight brokers and freight shipping consultants. Freight forwarding companies are redefining their business models to suit the demands from new market segments like e-commerce.