Navigating The Evolving Landscape: Recent Advances Reshaping The Transportation Industry

Derreck Travers is an accomplished leader in transportation and logistics. With a wealth of experience, he has successfully optimized supply chains, streamlined operations, and enhanced efficiency for various companies in freight forwarding, steel manufacturing, and e-commerce. Derreck’s strategic vision and data-driven approach have consistently delivered outstanding results, making him a sought-after expert in the industry.

How are recent advancements in transportation shaping the industry today?

A number of recent developments in the transportation industry are having a significant impact on global retail, from advancements in shipment tracking to the expansion of regional carriers to the increase in gig labor.

Shipment Tracking: In the early days, tracing a package meant dialing a toll-free number and waiting weeks for delivery confirmation, all while incurring charges. However, with the widespread adoption of the internet, we’ve witnessed a transformative shift. Now, we can verify package delivery within seconds and have access to detailed time events tracking the shipment’s progress. Carriers have stepped up their game by providing interactive maps and capturing photos of the package's delivery location. Moreover, proactive notifications—enabled by APIs and triggers—inform customers of precise delivery times with a few hour's notice. This level of service has become essential for any small parcel company. Thanks to technology, customers now receive richer delivery information at no additional cost.

Expansion of Regional Carriers: The industry has witnessed the remarkable growth of regional carriers over the past 15 years. When I first got involved with the small parcel industry, there were only 2 to 3 reliable options for quality service and comprehensive coverage within specific regions. However, the industry has recently undergone a significant shift. Excluding the large integrated carriers and a few shippers who’ve brought their small parcel operations in-house, there are now over 40 regional carriers offering competitive services compared to the integrated carriers. While competition is common among carriers, there’s a silver lining: the emergence of financially robust carriers committed to superior service and cost-effectiveness. This healthy competition benefits the industry, maintains a check on costs, and underscores the success of these regional players.

Gig labor: Across the logistics landscape, one of the most pressing challenges has been the labor shortage among all service providers. An aging workforce and impending shifts in working-age populations largely drive this scarcity. Railroads foresaw this trend two decades ago as their tenured employees began to retire, and the replacement process became less straightforward. In recent developments, the success of food delivery services utilizing “gig” workers has expanded to the small parcel industry. This approach provides carriers with greater flexibility in managing volume fluctuations from day to day while maintaining competitive wages compared to unionized companies. Although replicating this success across other modes of transportation will be challenging, it holds promising potential for the industry’s future.

In-house delivery services: Even before the surge in demand during the pandemic, major retailers were grappling with underperformance from integrated carriers. Escalating costs passed on to them prompted a strategic shift: large retailers began establishing their in-house delivery services. This phenomenon, previously observed in B2B models, is now unfolding in a B2C context. The economics differ significantly—fewer units/packages are delivered per stop, but there is a higher volume of stops per day. This is expensive, but despite the challenges, retailers have been compelled to take this route to safeguard their customers' overall capacity and delivery experience.

Weekend deliveries: The challenge faced by e-commerce companies lies in balancing customer satisfaction with delivery efficiency. While traditional carriers initially struggled to provide weekend deliveries, they eventually adapted by offering premium services. Now, competitive forces have driven carriers to operate seven days a week. This strategic shift helps them manage backlogs and distribute work more evenly, and it indicates a significant volume shift towards more competitive carriers. Interestingly, market dynamics continue to evolve despite integrated carriers expressing concerns about underutilized capacity. In the end, customers win.

Expanded drop-off or pick-up offerings: For decades, the European small parcel industry has been ahead of the curve, leveraging delivery lockers and local stores as convenient pickup points. Customers appreciate the certainty that their package won’t be missed, while stores benefit from increased foot traffic. However, this concept has been slower to take root in the US. Although some retail giants and integrated carriers have embraced it, the focus remains primarily on customer returns. However, the tide is turning as some start-ups are deploying networks of drop-off points for urban dwellers tired of lobby drop-offs. These pick-up points offer peace of mind—a haven for their eagerly awaited packages.

What specific challenges in logistics management remain unresolved due to the limitations of current services?

In our fast-paced industry, it’s easy to become enamored with technology’s promise to solve all our problems. However, we mustn’t lose sight of the fundamentals. While technology can be a powerful enabler, neglecting basic day-to-day management and common sense can lead to disastrous consequences. Focusing on the customer first and less attractive daily management will do more for building one’s business than any silver bullet tech solution.

"You should focus on seizing opportunities that enhance the customer experience and having a bias for action, even if it means sacrificing short-term profitability. This customercentric approach ensures enduring success in the long run"

Additionally, I’ve observed that service providers often prioritize “volume” over the customer delivery experience. Instead, carriers could create more value for shareholders by enhancing the customer’s delivery experience. Furthermore, streamlining network flows and minimizing lead times would eliminate unnecessary delays—why let freight sit idle for 8 to 12 hours when reducing those delays doesn’t incur extra costs? Most carriers focus on this, but their interactions with shippers should focus on the subject of continuous improvement rather than revenue.

Can you share more about a transportation initiative that has made an impact at Saks OFF 5TH??

At Saks OFF 5TH, our customers are at the center of everything we do. Over the past few years, we have seen how full visibility into shipping timelines has become paramount for our shoppers. So, in 2022, we reimagined our supply chain to introduce Guaranteed Delivery Date - an offering in which customers receive real-time delivery estimates by shipping option directly in their checkout window. This feature offers the insight and clarity our customers are looking for, reassuring them that the product they’ve purchased on SaksOFF5TH.com at an incredible value will arrive promptly. This success wouldn’t have been possible without our external tech partners, small parcel carriers, and dedicated fulfillment center associates.

Of the current developments impacting transportation operations, which one do you find most exciting, and what makes it stand out to you?

The e-commerce industry faces a significant challenge in meeting the two-day delivery standard due to the high costs associated with setting up fulfillment centers and optimizing inventory placement. Excessive warehousing and inventory expenses often lead to capital wastage. While some companies have tried locating warehouses in costeffective markets, middle-mile expenses can eliminate any cost savings benefit. However, there’s untapped potential in leveraging underutilized capacity in existing transportation services. Over the next few years, we’ll witness expansion and improved utilization of various transportation modes. Considering North America’s vast geography and dispersed population centers, the industry must rethink traditional norms and prioritize shareholder value by optimizing equipment utilization. When I was in steel manufacturing, I learned the importance of creating backhauls— such as shipping rebar to Vancouver and returning scrap metal to Seattle in the same truck—to unlock efficiencies. The sheer volume of unused cubic capacity across transportation networks is staggering. The opportunity is massive.

What key advice would you offer to professionals in similar roles operating within the logistics industry regarding actions they should take or avoid?

Focus on the long game instead of short-term gains. While low prices may yield immediate benefits, consistently disappointing customers will ultimately lead to future sales losses. You should focus on seizing opportunities that enhance the customer experience and having a bias for action, even if it means sacrificing short-term profitability. This customer-centric approach ensures enduring success in the long run.

In any organization, transportation managers often deliver challenging news or feel undervalued. However, it’s essential to recognize that the transportation function plays a critical role in both customer satisfaction and the bottom line. By prioritizing customer needs and adopting a long-term perspective, success becomes not just a goal for today but a sustainable strategy for the future.