Years of underinvestment have taken their toll on the nation's roads and bridges, and the load will continue to grow. Raising the weight limit on trucks could ease the pressure.
The bills known as S. 747 and H.R. 763 may not mean much to the casual observer, but they could be a game-changer for the freight industry. Recently reintroduced in the U.S. Congress at the urging of the Coalition for Transportation Productivity (CTP), the bills are the House and Senate versions of the Safe and Efficient Transportation Act (SETA), a measure that would allow states to raise the gross vehicle weight limit on trucks operating over their portion of the interstate highway system to 97,000 pounds from 80,000 pounds.
In order to qualify for the higher limit, trucks would have to be equipped with an additional, sixth axle to compensate for the extra weight. Proponents say the extra axle makes it possible to maintain the current weight per tire as well as the current braking capacity, which means stopping distances would remain the same. Truck size would be unaffected.
The measure's backers say raising the limit will make trucking operations more efficient. With the current limit in place, it's not uncommon for trucks to max out on weight before the trailer is filled, forcing shippers and carriers to use additional vehicles. Raising the weight limit would allow those companies to use fewer trucks to haul the same amount of freight.
The benefits would extend beyond truckers and shippers to the economy at large. Truck traffic has been growing far faster than road capacity for some time now, and the load will continue to grow. The U.S. Department of Transportation (DOT) has projected that motor freight volumes will jump by 87 percent over 2000 levels by 2020, and the American Trucking Associations has estimated that truck tonnage will double by 2035. Allowing companies to consolidate freight on fewer trucks could be an important step toward averting gridlock of epic proportions.
And the advantages wouldn't end there, according to the CTP and its 180 member firms and associations. Passage of SETA would also have a beneficial effect on roads and bridges, safety, and the environment, they say.
To begin with, the measure would reduce wear and tear on the nation's highways. A DOT study projected that raising the weight limit would save $2.4 billion in pavement restoration costs over 20 years, largely by reducing the number of trucks needed to move a given volume of freight. Furthermore, SETA would require operators of 97,000-pound trucks to pay user fees, with the revenues channeled into a special fund for much-needed bridge repairs.
The highways would be safer as well, proponents say. The single biggest factor in tractor-trailer accidents is the number of vehicle miles traveled, which suggests that any steps taken to minimize those miles would have a corresponding effect on the accident rate. The U.K.'s experience bears that out. In 2001, the U.K. raised the allowable weight on a six-axle truck to 97,000 pounds. Through 2007, tonnage continued to increase, yet vehicles miles traveled remained flat and accident rates declined.
On top of that, several studies have indicated that the measure would cut fuel use and result in cleaner air. For example, a study by the American Transportation Research Institute showed that six-axle trucks carrying 97,000 pounds get 17 more ton miles per gallon than an 80,000-pound truck with five axles. A DOT study estimated that the higher limits would save 2 billion gallons of fuel per year and result in a 19-percent drop in emissions and fuel consumption per ton mile.
It's important to note that no state would be forced to raise truck weight limits. SETA would simply give them the option of setting higher limits on routes they consider suitable for heavier trucks. On balance, it seems to be a good, at least partial, solution to a problem that's not going to go away.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
Chinese supply chain service provider JD Logistics today announced plans to double its overseas warehouse space by the end of 2025 as part of the company’s broader global supply chain strategy to meet the growing demand for cross-border logistics solutions.
As part of that effort, the company will also expand its network of bonded and direct-mail warehouses. That would mark a significant expansion since JD Logistics—which is the logistics arm of JD.com and is also known as “JingDong Logistics”—currently operates nearly 100 bonded, direct mail, and overseas warehouses. Those facilities total about 10 million square feet in markets such as the U.S., Germany, the Netherlands, France, the U.K., Vietnam, the UAE, Australia, and Malaysia.
Specifically, JD Logistics said it is focused on expanding its presence in Europe and the U.S., establishing collaborative supply chain networks capable of delivering fulfillment services within 24 hours in several regions. In support of that, the company plans to increase its international cargo flights from China to destinations such as Malaysia, South Korea, Vietnam, the U.S., and Europe to enhance cross-border transportation services. It will also explore the development of self-operated transportation and delivery capabilities overseas.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
The clean energy transition continuing to sweep the globe will give companies in every sector the choice to either be disrupted or to capitalize on new opportunities, a sustainability expert from Deloitte said in a session today at a conference in Orlando held by the enterprise resource planning (ERP) firm IFS.
While corporate chief sustainability officers (CSOs) are likely already tracking those impacts, the truth is that they will actually affect every aspect of operations regardless of people’s role in a business, said John O’Brien, managing director of Deloitte’s sustainability and climate practice.
For example, regulatory requirements on carbon emissions are expanding in every region, which means that even if a specific company doesn’t have to change its own practices, it will almost definitely need to flex to accommodate its partners and suppliers as they track scope 3 emissions or supply chain practices.
Likewise, companies are starting to challenge the classic concept of “force majeure” events than can cancel service providers’ contractual duties due to unforeseeable weather events. As the new argument goes, extreme weather patterns increasingly occur in accordance with climate scientists’ forecasts, so those hurricanes and wildfires are in fact foreseeable after all.
But one strategy for coping with the cost of those changes is to mine the power of the data that most companies will soon need to collect as part of their evolution. Instead of simply tracking its trucks to trim their routes and emissions, a transportation company could use the same data to manage their maintenance and fuel consumption.
“The climate management transition is going to be a massive disruption, but with that comes massive opportunity,” O’Brien said from the keynote stage at the “IFS Unleashed” show. “Don’t waste compliance efforts just on compliance, use it to create new value. You’re collecting all that new data, so use it!”
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.