The transportation industry is part of a complex global system that processes information and goods that everyone needs. However, the future of the shipping industry in 2022 is uncertain. Let’s take a closer dive into our transportation industry outlook to see what’s happening and what might happen throughout the coming year.
The Future of E-commerce
E-commerce is continuing to change the game of freight management. According to TheStreet, “Analysts project e-commerce sales in the U.S. to grow 17.3% in 2022 (slightly slower than 2021's 17.9% growth.)” Still, that growth means that the industry will experience the continued pain of a capacity crunch as new COVID-19 variants emerge. As a result, the future of e-commerce will exacerbate the capacity crunch and lead to more uncertainty in the industry.
The Shipping Industry In 2022 Will Still Be Subject to Cultural Differences
The shipping industry in 2022 will be under the microscope as global trade ramps up to meet the demands of e-commerce. Remember that the industry processes millions of requests using available shipping methods such as slow vessels, barges, and airplanes. Still, it will involve all sorts of intermediary companies and stakeholders, including warehouses, railroads, ports, and finally, delivery services and cultural differences between areas will see more interest in renewing or changing the standards of Incoterms.
The shipping industry has also witnessed increased cyberattacks due to its increasing reliance on information technology. To manage risk efficiently, industry professionals must rely on a robust data-sharing network that ensures that all information is accessible to all stakeholders in real time. Taking such steps within a broader transportation industry outlook and strategy will help eliminate vulnerabilities that make it easy for hackers to gain access.
Ocean Freight Will Change Throughout Shipping Industry In 2022
Container shipping will face challenges in the future as demand declines and ports cannot accommodate larger vessels. To stay competitive, shipping companies will implement several changes. To cut costs, they will be forced to turn over entire fleets of vessels to independent operators who can run them at a lower price.
In the future, ocean freight could transport more cargo at lower costs, but this seems far-fetched given the current market. The Freightos Baltic Index Global Container Freight Index shows container rates still above $9,500, and growth is expected to continue. However, shippers can restore order for rates by better managing their flow of imports and helping to clear existing backlogs. To make this happen, shippers must improve operational efficiencies and have a robust global network that includes tracking and tracing regulations. Ocean carriers will shift their focus away from commodities toward time-critical consumer goods and perishable freight to further improve efficiency. Of course, this comes in tandem with massive changes in port expansion and the adoption of new policies that will make managing U.S. imports easier.
Additional Factors in the Air Freight Shipping Industry In 2022
The air freight industry will be dominated by e-commerce in 2022, providing significant opportunities for businesses worldwide. Although this growth will bring in higher demand and profitability, expect to also face a growing number of challenges, including a lack of infrastructure, regulatory hurdles, and increased operations costs. Air rates do appear to be recovering following the Christmas hike, but rates are still sitting at $4.30/kg as of the week ending January 16, 2022, according to the Freightos Air Freight Index. Furthermore, that rate is well above most rates experienced throughout 2021, except for a spike around Independence Day. To cope with these issues, industry professionals must improve cooperation among stakeholders to ensure that carriers can transport cargo efficiently and cost-effectively.
The Future of Rail as a Transportation Industry Outlook
Rail transport, one of the oldest forms of freight transport, will be a crucial mode for intermodal transport in the future. Railroads will not only connect ports and major cities but also help connect smaller cities to larger ones. As further explained by Ari Ashe of JOC.com, “After a tumultuous 2021, international intermodal shippers are focused on how railroads can prevent bottlenecks from returning in the Midwest and the South Central US, while domestic intermodal shippers are focusing on when new container capacity will become available and how much contract rates will increase in 2022.” To improve efficiency, rail operators must adopt new technologies, including wireless sensor networks, wireless monitoring systems, and data mining software that help reduce costs.
Over-the-Road Rates and Expectations in 2022
Unlike water and air, road transport is a local industry with limited infrastructure that limits the movement of goods to a specific region or country. To expand, industry professionals must adopt new technologies to ensure that goods move safely and efficiently. They will also have to invest in road construction as traffic congestion becomes a significant issue in urban areas, increasing costs significantly. Meanwhile, rates are expected to continue climbing 13% or more, reports TruckingInfo.com.
Stay Ready for the Future of the Transportation Industry With Wicker Park Logistics
The future of the shipping industry in 2022 is uncertain, but that uncertainty will stimulate innovation, growth, and strategic partnerships. Shippers need a clear strategy for improving freight management as the age of disruption continues. Know what is happening and get on the path toward success by connecting with Wicker Park Logistics now.
