LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global road freight transportation services market is expected to grow at a CAGR of nearly 6% over the next five years due to the development of high-quality road and highway network especially in emerging and developing countries.
The research report titled ‘Global Road Freight Transportation Services Market: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The market penetration of the e-commerce industry has been due to products reaching a wider network of consumers. Advances in contract logistics and use of intermodal transport services have enhanced the importance of road freight services,” said lead Technavio procurement expert Angad Singh. “Service providers are focusing on building a cross-industry expertise with delivery services that are cost-effective, reliable, and adhere to regulatory and safety standards. They have also invested in technological innovations such as telematics, route optimization and navigation, sorting technology, and TMS,” adds Angad.
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Cost saving opportunities in the road freight transportation services market
Businesses can leverage cost saving opportunities by partnering with suppliers that are open to adopting new and innovative technologies and by engaging them through medium to long-term volume/load based contracts.
Technavio procurement experts have segmented the cost saving opportunities in the road freight transportation services into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Telematics helps to determine the optimum condition of freight vehicles such as trucks by capturing close to 200 data points, including speed, RPM, oil pressure, and idle time. The data generated is then analyzed to help reduce fuel consumption, emissions, maintenance costs, and improve driver safety.
Small sort technology is used to reduce the time required to sort packages (by reducing memorization), thus improving productivity and quality.
Optimization of procurement practices saving aspects
Businesses must engage with road freight service providers that have expertise in dealing with transportation across a wide range of industries. The type of shipment includes perishables, chemicals, and oil.
This gives an indication about the service providers' capabilities, focus on R&D, and adherence to safety and security requirements.
Bundling of services saving aspects
The aspect of information symmetry between the business and the service provider is important in this market. A high-quality and robust cargo management software ensures easy and simplified information sharing.
Real-time tracking and visibility of shipments, information on freight rates, online collection of shipping documents, and 24x7 customer support are some of the features that a cargo management software must have.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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