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3 Trends Changing Freight—and Why They Matter

Jul 18 2018
Global Container Terminal- New York on Staten Island

Freight is one of those not-quite-behind-the-scenes industries that affect us all.

We want the items we’ve ordered online to be delivered quickly. We want our favorite stores to stay routinely stocked with fresh goods. And we want clean air and little traffic. Freight affects all of this and more.

The freight industry is anything but static. As consumer behavior evolves and technology advances, modes of freight transportation change, too. Three trends are currently altering the state of freight.

Shifting Towards Multimodal Freight

Trucks play an outsized role in moving America’s freight. Nationwide, about 70 percent of freight is moved that way; locally, it’s almost 90 percent. The negative effects of this on New York City are stark, including traffic congestion and pollution. But there is another, more human component to the trouble of trucks: there aren’t enough drivers. Long-haul trucking is a tough job. The open road appeals to some, and it can be a good-paying job for someone without a college degree. But the downsides are enough to dissuade many from taking up—or sticking with—the profession, and there are currently about 63,000 open positions that the industry can’t fill. The shortage is driving up the cost and slowing down the delivery of everyday goods. As a result, other modes of transportation, including maritime and rail, are increasingly important parts of New York City’s freight network and system.

Sky-High Warehousing

Freight distribution currently comes in two major categories: general distribution, which serves retail stores and businesses, and e-commerce distribution which serves residents. Amazon Prime has made many of us expect two-day delivery, and sometimes even that feels too long. As e-commerce grows (it has jumped 15 percent annually since 2009), so does the need for local warehousing, which allows for speedy—sometimes even same-day—deliveries. The challenge, of course—as anyone who has hunted for an apartment in NYC knows—is that space is at a premium. The warehouses holding most of the city’s goods have historically been located in central New Jersey or eastern Pennsylvania where open space is more abundant. As expectations change, this just isn’t cutting it anymore. With scarce urban space, the best answer might just be what commercial and residential developers figured out decades ago: build up. Vertical, or multistory, warehousing has become common in such Asian cities as Hong Kong and Tokyo and is now being tested in American cities including New York City and Seattle.

Blockchain for the Win

And, as it has done so many times before, technology is changing the game. In this case, it’s blockchain that is making an impact. The distributed ledger technology, most typically associated with the financial sector, is now disrupting logistics and supply chain sectors by providing greater transparency—in real time—about transactions without sacrificing privacy or confidentiality. And not only can companies can get instant updates about the status and locations of shipments, but the technology can provide tangible safety benefits. For example, contaminated food could be traced back to its source, ultimately providing greater food safety for consumers.

These trends are changing freight today, and new ones will shift the industry further tomorrow. To stay competitive, smart businesses will take note. As they say: freight won’t wait.

Learn more about Freight NYC, the City’s plan to modernize its freight system and infrastructure while creating thousands of good-paying jobs.