The global transportation industry is expected to grow at a rate of 3.4% through 2027. Although this is a positive outlook, growth in this sector is much less robust than pre-pandemic levels when predicted growth was close to 20%.
The key to growing your business during this is offering clients the most cost-effective, flexible, and efficient services possible. Equally important is monitoring industry trends and adopting strategies to outcompete other market players.
Here are eight such trends — some positive, some negative — to consider as you look to grow your transportation business.
Trends driving growth in the transportation industry
Automation can speed repetitive, time-intensive tasks and reduce errors associated with manual workflows and processes that can hamper growth. Automation can be applied to reservation systems, fleet tracking, logistics and freight flows, asset trace and tracking, dynamic route allocation, chatbots, and more.
2. Software-as-a-service (SaaS)
Cloud SaaS systems can bring elastic capacity and high-performing computing to your business, without investment in costly on-premises solutions. SaaS supports introduces efficiencies and cost-savings across all business functions, including HR, sales and marketing, finance, legal, and more.
3. Mobility-as-a-service (MaaS)
Integrating various forms of transport services into a single mobility service that is accessible on demand can streamline operations for transportation companies. Think of it as a real-time platform that can integrate any combination of transportation methods — such as a plane, train, truck, or car — to streamline and centralize trip planning and payment methods for easy route planning, simplified payment, and building customer-focused two-way relationships.
4. Tracking technologies
Tracking technologies are nothing new, but they have evolved to become a central pillar of successful transportation companies. Anti-theft GPS, near real-time location information, and more, are increasing traceability for entire fleets and individual freight items.
5. Last-mile delivery
Driven by pandemic spending on online purchases and the growth of e-commerce, the last-mile delivery market is expected to expand at a compound annual growth rate (CAGR) of 20% through 2030. Investments in small, last-mile delivery vehicles are key to capturing market share in this growing segment.
6. Electric vehicle technology
Government legislation, rising fuel costs, and consumer sentiment is driving demand for electric vehicles. In the trucking sector, growth is expected at a CAGR of 25% through 2027. While barriers remain, notably an adequate recharging infrastructure, the shift to the electric trucking industry is here.
Trends that impede growth in the transportation industry
1. Truck driver shortage
Despite demand, companies are losing drivers at a worrying rate threatening growth and the industry’s ability to keep goods moving safely and on time. Without intervention, the current driver shortage of 63,000 people is expected to deepen by 2026.
2. Increased regulatory complexity
The transportation industry is heavily regulated. Numerous licenses and permits are required to operate within the law. Complicating this is a lack of insight into policy – 56% of carriers and 47% of shippers wish they had more visibility into government policy and expert guidance on the impact of regulatory changes.
Furthermore, if your transportation business is seeking to expand into new states it must comply with differing requirements. Always consult with experts about the licenses and paperwork needed to comply in all states where you operate.
How process agents can help with expansion plans
As you look to grow your transportation business into a new state, you can overcome regulatory complexity with the help of a process agent.
A process agent can help your business qualify to do business in a foreign state as well as obtain business licenses and file annual reports.
If your business is expanding through a merger or acquisition, a process agent can help with due diligence and merger filings. They can also assist with the formation of subsidiaries.
A process agent is also required by law. Motor carriers, brokers, and freight forwarders, and others in the trucking industry are required to obtain the authority of the Federal Motor Carrier Safety Administration (FMCSA) to operate. One of the conditions of obtaining and keeping that authority is to designate a process agent in one of the 48 contiguous states and the District of Columbia.
How do you appoint a process agent?
Use form BOC-3 to appoint the process agent. You can either set forth the name of the agent and the street address for every state, listed individually, or appoint a blanket process agent that covers every state. (A blanket designation is the naming of one association or corporation on file with the FMCSA which will be the applicant’s process agent for every state and DC.)
The advantages of working with a blanket process agent
Appointing a blanket agent has many advantages. It can help consolidate your company’s FMCSA obligations because the agent acts as your BOC-3 blanket process agent in each jurisdiction in which you operate.
It is also easier to keep track of notifications when they come from a single agent and receive prompt notifications if any regulatory changes occur, mitigating any potential penalties such as loss of good standing if you fall out of compliance with FMCSA.
Seize the opportunities
Despite the challenges facing today’s trucking industry, there is plenty of opportunity for growth for those businesses that keep up with the latest developments and services.
A reliable professional registered agent such as CT Corporation gives you peace of mind that you won’t miss a critical filing and endanger your business’ good standing and its right to defend itself in court. With CT Corporation, you can expand your transportation company with confidence.