Today is New Year’s Eve, a day when we reflect on the happenings of the past year and look forward to what’s coming in 2015.
It’s been an exciting year in materials handling news. Labor negotiations between dock workers and ownership at West Coast ports continued to cause anxiety among carriers and retailers. The US economy continued to show steady, if moderate, growth. And mid-term elections stacked both houses of Congress in favor of Republicans, which could either mean more or less gridlock in Washington, depending on who you ask.
There are several stories that will carry over into the coming year. The government will have to iron out some sort of deal on the Transportation Bill, which funds infrastructure such as federal highways. The newly widened and deepened Panama Canal will open, allowing super-sized cargo ships to move from Asia to East Coast ports for the first time. And the expanded use of robotics in manufacturing and distribution will continue to fascinate industry observers.
These stories are already familiar. But here are five new predictions to look out for in 2015:
1. Logistics Will Become More Complicated — As more consumers turn to the Internet to find the goods and services they want, manufacturers will have to find innovative new ways to get their products to buyers faster, more efficiently, and more cheaply. That means logistics will become more reliant on third-party carriers, investment in futuristic technology such as flying drones and self-driving trucks will increase, and the number of freight carriers will continue to consolidate as the industry finds ways to become more efficient.
2. Amazon— The world’s largest online retailer had a big year in 2014. But Amazon will become an even bigger player in retail in the coming year as it rolls out new “killer apps” such as same-day delivery, grocery ordering, and an expansion of its already successful streaming media offerings. Always on the cutting edge of web-based retailing, Amazon will continue to capture an ever-growing market share among consumers in practically every retail field.
3. Infrastructure Funding — With President Obama no longer concerned about having to be reelected and a Republican majority in both the House and the Senate, you might think opposing idealogies will result in no new highway bill being passed. But lawmakers still need to answer to their constituencies and aren’t willing to be embarrassed by crumbling bridges, potholed interstates and other signs of a weakening infrastructure. So a deal to pass a new Transportation Bill will be made sooner rather than later.
4. Reshoring — Many of the manufacturing jobs that were sent overseas in the ’90s and ’00s will start to return to the US as tensions with China and other Asian countries add to continued uncertainty. Meanwhile, the push for a higher minimum wage in many states could result in a boost in the standard of living for the US middle class.
5. Higher Shipping Costs for Everybody — FedEx, UPS and other package carriers finally realized that they were losing money charging under the old weight-vs-distance pricing method and invested in equipment that charges based on how much room a package takes up. This dimensional pricing, or “dim pricing”, model will mean higher freight costs, which will drive costs of many items up for consumers.
Regardless of what happens during the coming year, it’s certain to be an interesting and exciting one. Here’s wishing you a happy and safe New Year!