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March 2, 2017 12:00 AM, EST

Surge in E-Commerce is Disrupting Trucking Industry's Business Model, Expert Says

James Stevenson by John Sommers II for TT

NASHVILLE, Tenn. — Astronomical growth in internet online retail purchases by U.S. consumers already is beginning to have a significant effect on the trucking industry’s business model, an information technology expert told executives attending American Trucking Associations' Executive Leadership Forum here.

“We’re actually shopping online more than shopping in stores,” said James Stevenson, vice president of sales for TMW Systems. “It’s a massive shift, and if you think about that, it’s what we as consumers expect.

“Ultimately, this is going to be a driving factor for what happens to the retailer, which is also what happens in the transportation space.” 

Stevenson spoke at a session entitled “The Move to Omni-Channel Freight Service: Solving the Last-Mile Delivery Puzzle Through Advanced Transportation Management Systems.”

Stevenson said consumers are now shopping 24-hours-a-day, 365-days-a-year, and brick-and-mortar retailers are “scrambling,” trying to figure out how they’re going to survive.

“This was the first year that more people shopped online than actually visited the brick-and-mortar stores,” Stevenson said. 

The result, he said, is that truckers will need to be more flexible and freight flows will change.

So far, the trucking industry has adapted very slowing to the seemingly inevitable changing future of the transportation business model, he said.

“This is coming, one way or another,” Stevenson said. “Everything you’re doing today, all the infrastructure and everything that you’ve done, is getting ready to change to be able to satisfy the e-commerce and omni-channel that is actually thriving.”

The speed of the change and on-time final-mile demand is going to hit truckload carriers the hardest, and will be a boon for many less-than-truckload carriers, he said.

“As velocity gets cranked up, shipments are going to go down,” Stevenson said. “It’s going to have to. You can’t have one shipment a week anymore. ... Now you’ve got complex optimization, customers and products that can’t ride together, got different shipment sizes and all these different time windows.

“And the customer wants to know when you’re going to be there because they’re scheduled to be off work,” he added.