For many businesses, the effective new year is in April, when taxes close and people really start to emerge from winter hibernation. However, this year April was more lockdown than business growth, but as we emerge more and more, now seems like an appropriate time to look at what 2020 may have in store for the freight industry.
China may lose ground – at least in the short term
Over the last decade or so, China has been building itself up, both as the world’s manufacturing hub and as one of its most important markets. As a result, it has become a key destination for the freight industry. The election of President Donald Trump led to a trade war between the U.S. and China, which may well rumble on until the U.S. election in November.
Even if the U.S. and China do officially patch up their differences, the fact remains that the Coronavirus has highlighted the risks of having too much of a dependence on one area either to provide important raw materials and manufactured goods or to buy goods produced elsewhere. It is therefore entirely possible that companies will seek to diversify both their suppliers and their marketplaces to protect themselves against the risk of another pandemic.
In this short term, this could be a painful transition both for China and for all the companies involved in doing business with it, including freight companies. Over the long term, however, it may be beneficial in that it will encourage China to diversify into other areas, especially value-add areas and encourage the development of new industries in other parts of the world, thus building new market places.
Regulation could become challenging
The UK freight industry has long become used to frictionless access to the EU single market. With Brexit on the way, however, that could soon be set to change. In fairness, it may not. The UK government may be happy to allow the free movement of goods, but that is by no means guaranteed. Even if it does, there is still the issue that goods need to be transported by people. This means that unless there is free movement of people then there will need to be some form of immigration checks.
Hopefully, something will be worked out before the UK finally severs all legal ties with the EU, even if it’s only increasing resources at customs (and immigration) points to make the checks as quick as possible, but, as the old saying goes, “hope is not a strategy”. Anyone in the UK involved in the freight industry should make it a priority to keep up-to-date with any significant Brexit-related news (significant meaning facts rather than speculation) and consider what their options might be so that they are ready to act promptly if the need arises.
Technology and automation may help to ease some of the pain
There are all kinds of practical reasons why the freight industry as a whole is less open to automation than many other industries. It is, however, starting to make increased use of it, especially as part of the load-tendering process. Similarly, transportation management systems are already massively important in the freight industry and are set to play a crucial role in keeping it viable over the long term.
The coming years are likely to see the freight industry make a big push into the cloud so that the existing benefits of TMSs can be partnered with the benefits of the flexible, scalable infrastructure, which has made the cloud so popular with businesses across all sectors. This could open up a wide range of interesting opportunities for companies of all sizes.