The Rise of E-Commerce
Between 1999 and 2017, E-commerce sales rose from a mere 1% of all U.S. retail sales to more than 9%, resulting in a 3,000% increase in less than two decades. Today, annual growth of e-commerce sales averages around 13-16%.
And as online stores like eBay and Amazon continue to grow exponentially, the need for quick, reliable delivery services has only increased.
Along with the rise of E-commerce, the omnichannel model has also affected the way transportation and logistics are handled. In addition to higher demand for services like next-day and overnight shipping, consumers have come to expect their favorite brick and mortar stores to always have items in stock.
This has caused retailers to build thousands of localized distribution centers that are closest to the customer, making fast shipping possible. Amazon pioneered this concept and used it as a competitive advantage to become the top online retailer in the world.
So, how has this affected commercial fleets and what does this mean for fleet managers?
E-Commerce and its Effect on Fleets
With more localized distribution centers around the country, the average length of a haul has decreased dramatically. Under the current HOS regulations, drivers that perform short hauls are not required to log their hours if they meet the requirements of the 100 air-mile radius exemption.
Lower Employee Turnover
Short haul drivers are more likely to stay at their job than long haul drivers. Shorter hauls provide greater flexibility and allow drivers to spend more time with friends and family and find a work-life balance. By allowing employees to spend less time on the road, burnout is greatly reduced.
Lessening the Impact of Parking Shortages
Parking shortages are also less likely to affect short-haul drivers as they seldom spend nights out on the road. Loading zones, however, remain difficult to find as more driver compete to make deliveries on time.
More Training Opportunities
Shorter hauls provide fleet managers with opportunities to train newer drivers and help them get accustomed to making small deliveries before making cross-country trips. The flexibility of shorter hauls may also make driving more appealing to a younger generation that values freedom and setting their own schedule. By introducing a new pool of talent to the industry, we may be able to solve the shortage of drivers in the future.
As both online and brick and mortar retailers begin to guarantee shorter shipping times, companies are turning to third parties to complete deliveries. This is great news for smaller logistics companies who operate locally. In just 5 years, XPO Logistics grew from a non-asset truck brokerage company with $175 million in revenue into the largest logistics provider in the US with revenues of more than $15 billion. Not bad.
The demand for faster shipping times and fully-stocked retail stores has not only increased the demand for fleet drivers but has also reduced the average length of hauls. Short-haul drivers are more likely to stick with their job and are exempt from HOS regulations that would otherwise cause them to race against the clock and participate in dangerous behaviors, such as speeding.
With live streaming dash cameras installed in your fleet vehicles, however, you can greatly reduce the chances of an accident, lower your monthly insurance costs, and protect yourself in the case of legal action. And thanks to a 360-degree view inside and outside the cabin, you can “ride along” with your fleet drivers and correct unsafe behaviors before they form.
You can also track the whereabouts of your fleet vehicles in real time and ensure that your shipments will be delivered on time.
Want a safer, more profitable fleet? Visit Safety Track’s page for more information on our live streaming dash cameras and GPS fleet tracking systems.