2023 State of Transportation Report

Key Findings

• 99% of shippers agree they would take advantage of electric or alternative energy vehicles if carriers in their networks offered them — and 79% strongly agree
• 94% of transportation leaders agree consumer demand for more sustainable products makes reducing emissions a more critical priority in the next 12 months
• 70% of transportation leaders say strengthening mutually beneficial transportation contracts with current partners is a key focus area for the next 12 months
• 59% of transportation leaders predict freight capacity will be more available over the next 12 months

Introduction

Transportation leaders are facing mounting pressure to reduce costs and emissions in freight operations. Volatile fuel prices, capacity fluxes, and other macroeconomic challenges are on the minds of industry leaders who are still reeling from the disruption of the last few years.

All of this is happening as transportation teams are working to regain sustainability progress that was eroded by the pandemic, which forced a three-year delay in emissions reduction action. But now, network priorities have shifted, and leaders must recalibrate their strategies to adapt to the new market balance.

It’s a process that will require the right teams, tools, and partnerships to take advantage of emerging opportunities for decarbonization, efficiency, and cost savings over the next 12 months.

To understand how transportation leaders are navigating macroeconomic challenges and planning for the future, we surveyed 500 transportation leaders, including shippers and carriers, about the current state of the transportation industry.

Macroeconomic forces continue to shape transportation challenges

Macroeconomic trends like inflation, economic growth rate, employment growth rate, government policies and regulations, trade, and industrial production continue to cause headaches for transportation leaders in 2023. Of the top challenges for the next 12 months, volatile diesel fuel prices ranks highest on transportation leaders’ list of concerns. With cost pressures mounting on all sides due to inflation, it’s understandable transportation leaders are eager for relief.

Unfortunately, they won’t find it in linehaul rates. Nearly two-thirds (63%) expect linehaul rates to remain higher than average over the next 12 months, a product of increased labor and equipment costs.

Capacity, however, will be easier to procure for transportation leaders this year. The capacity constraints of the past few years have eased, and may ease further — 59% of transportation leaders predict freight capacity will be more available over the next 12 months. It’s a trend that will enable decision-makers to reprioritize strategic planning because the current range of available options offers space to make adjustments to their networks.

Emissions reduction is top of mind — but transportation leaders need support to make meaningful progress

Transportation leaders feel pressure from all sides to improve freight sustainability. Nearly all (94%) agree consumer demand for more sustainable products makes reducing emissions a bigger priority in the next 12 months. And business leaders seem to recognize consumers’ desire for increased sustainability. Internally, direction to prioritize emissions reduction comes from the top, with 42% of transportation professionals saying pressure to improve transportation sustainability most often comes from the C-suite.

But making headway on emissions reduction goals appears daunting in the current economic climate. Three in five transportation leaders (61%) believe ongoing macroeconomic forces will make it nearly impossible to meet emissions reduction goals over the next 12 months. An additional 33% believe it will be somewhat difficult, with only 4% believing current economic conditions will have no impact on their company’s ability to meet emissions reduction goals.

Given this context, it’s no surprise shippers are searching for solutions. An overwhelming majority of respondents on the shipper side (99%) agree they would take advantage of electric or alternative energy vehicles if carriers in their networks offered them — and 79% strongly agree.

Carriers have heard calls for more alternative energy options loud and clear. Nearly all (97%) see value in adding EVs to their fleets — and 59% plan to do so by the end of 2023.

Despite the widespread interest in EVs, the majority of carriers are still in the pilot phase of adoption, meaning loads moved on EV equipment will be minimal in the immediate future. It will take time for them to test EV capabilities and collect real-world data on ownership and usage costs before expanding their fleets.

Fortunately, transportation leaders do not have to wait for EV and alternative energy equipment and infrastructure to become mainstream to start achieving their emissions goals. In fact, many may be overestimating the difficulty — and cost — of making emissions progress in the near term.

The abundance of intermodal capacity available in the market paired with the rise in alternative energy vehicles means the ability to hit sustainability targets has never been greater. But transportation teams need the right tools, data, and partnerships to implement solutions that deliver quick efficiency improvements, reducing both costs and emissions. Fortunately, these solutions and partners are readily available to help transportation teams achieve quick sustainability wins.

Strengthening partnerships is paramount for success in the current economy

If there’s one area where shippers and carriers find common ground, it’s this: Success hinges on partnerships.

As transportation leaders look to navigate current economic and sustainability challenges, solidifying relationships with current and new partners will be key for both shippers and carriers. In fact, 70% say strengthening mutually beneficial transportation contracts with current partners is a key focus area for the next 12 months.

In a historically transactional industry, this may be an encouraging sign partnerships are shifting toward a more cooperative environment. Carriers and shippers can look to external transportation data partners for support in establishing, tracking, and reporting on metrics. These insights will help both parties measure progress toward goals, uncover new synergistic opportunities, and contribute to more seamless RFP processes.

As shippers search for new carriers, they will need to balance a comprehensive list of competing priorities. Network priorities like cost, capacity, and reliability will be top of mind as shippers explore carrier partnerships over the next 12 months.

Despite hurdles, 2023 offers ample opportunity for transportation teams

The next 12 months will undoubtedly present challenges for transportation leaders. But amid uncertainty, new opportunities are emerging to adopt forward-thinking transportation strategies.

Across the board, transportation leaders plan to double-down on strengthening current partnerships while exploring new relationships to fill specific gaps — especially when it comes to sustainability. But they may need help identifying and quantifying opportunities as they juggle multiple priorities, like cost savings and emissions reduction.

Breakthrough has the expertise and technology you need to:

• Fine-tune your transportation strategy
• Set emissions benchmarks
• Achieve greater network visibility
• Strengthen partnerships

Equip your team with the tools they need to proactively and efficiently navigate transportation challenges. Schedule a demo today.

Methodology

Breakthrough surveyed 500 transportation decision-makers (including 350 shippers and 150 carriers) in the U.S. regarding their transportation goals, priorities, and predictions for the next 12 months. The survey was conducted March 8 through March 23, 2023.