It seems everywhere a person looks, there are retail closures taking place at alarming rates. It’s a bittersweet sight. While these older models of commerce are giving way to newer and more convenient alternatives, their fall constitutes the end of an era.
First it was big-box retailers like Sears and K-Mart closing stores at a rapid pace. Then specialty stores like Toys R Us saw their business declining, such to the point they couldn’t keep their chain open anymore. Even regional chains like Magic Mart that have been small but constant throughout the years are finally closing their doors.
These changes are alarming for multiple reasons. While it does show how more people are gravitating to online shopping, it also means many things can change in the U.S. economy moving forward. One thing that can be said about the economy is that it thrives off connectivity – everything influences everything else, to some degree.
Economists are quick to point out these quirky connections. For example, the price of baseball gloves can affect the price of yogurt – and that’s just the beginning. But more obvious connections, and ones that reach further, are of more concern right now. Primarily, those in the trucking industry are worried about how the struggles of retailers will affect the for-hire market.
They have good reason to be concerned, as retail represents over a fifth of the for-hire truck market. That’s a lot of business to lose out on. E-commerce, despite growing in popularity, represents only 13 percent of retail sales and less than 3 percent of trucking freight. Those numbers are expected to change by 2030, where digital sales are expected to represent about a third of all retail sales and around 7 percent of the trucking market.
As e-commerce juggernauts like Amazon continue to gain market share, the market for for-hire truckers can become a little harder to work in. Companies like Amazon may find it more viable to build their own private freight networks, managing everything from the shipping costs to the logistics calculations on their own. That means less work is available to the for-hire market.
For Amazon, it makes sense – the more of their own freight transport they control, the less they have to worry about coordinating with independent brokers and trucking companies. This is as much a threat to trucking as anything – maybe even more so than the looming possibility of autonomous vehicles. It’s also worth noting that the auto industry accounts for about 10 percent of trucking freight.
While 2030 could see a jump in e-commerce, it could also see the vast majority of miles being traveled by electric and autonomous vehicles – even in the passenger vehicle section. That means the main industries trucking depends on could be going through an evolution – and taking trucking along with them.
Trucking is influenced by regulations, economic fluctuations, buying trends, and more. The only thing constant in a field like this is change, and that’s exactly what’s on the horizon within the next decade.