Global road transport worth $2.4 trillion and growing
A new report released this week has found the global market size for road freight services is currently growing at nearly 5 per cent yearly with Australia alongside Western Europe and North America demonstrating high maturity for buyer and supplier competition courtesy of early adoption of advanced technology.
The report released by procurement intelligence firm, Beroe Inc, confirmed that emerging economies like those in Africa would continue to expand road transports growth globally in the next four to five years, resulting in improved road freight activity.
Increased retail sales will drive the demand for trucking, according to Beroe, which is based in North Carolina, with retail e-commerce growing at between 14-15 per cent annually.
While demand for logistics will increase in metropolitan cities fuel prices remain a major constraint in the road freight industry and hold nearly 30 – 35 percent of trucking freight rates.
Driver shortages in North America, Europe, and Australia with rising fuel costs would highly impact the overall costs and profit margins of the industry, found the report although market wage rates for truck drivers are anticipated to increase in the near future in response to a shortage of skilled drivers and government regulations.
At current, the major cost components for transport operators are labor and fuel costs, as they amount to nearly 60 percent of the total operating costs.
While rail remains a major threat to the road freight industry, the higher accessibility and customisations available to it kept it relevant and accessible to new players joining the market.
“The introduction of digital identifiers for accurate tracking of consignments is the new trend on the technological front of logistics and road freight services industry,” the report noted.
“Global suppliers provide value-added services in addition to transportation such as warehousing, end-to-end supply chain solutions, and inventory management, which streamlines the supply chain.”