Shortening the links

TORONTO — Unless shippers and transporters are willing to pay for triple-digit oil prices, they might want to start thinking of supply chains closer to home.

The conventional wisdom among transportation thinkers is that the price of energy will ultimately decide the winning modes of shipping in the future.

As a result freight transport will have little choice to become more regionalized with manufacturing finding a delicate geographical balance between suppliers and end users.

In North America, that could mean more emphasis on hub-and-spoke distribution, with various modes of transport carving specific lanes in a regional intermodal network.

Sandeep Kar of Frost & Sullivan says that to varying degrees most nations are becoming more urbanized and by 2020 major amalgamated "network" cities will evolve into "branded" cities split up into three belts.

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The first is where high-income, small families reside along with retail and financial institutions. Here, delivery will be primarily in small trucks and delivery vans, many of them hybrid electric vehicles.

The second belt is where the vast middle class and manufacturing blocks are; while the third will be for intermodal freight transfers where more conventional long haul trucks and rail are linked to.

"The focus for class 8 (linehaul) trucks, then, is to connect all three belts," says Kar. "Thinking about how commercial vehicle mobility fits with urbanization is the number-one priority of the decade."

Logistics providers, then, will need to consider whether to position themselves as low cost, where customers can select just the services they need, or as high-technology providers offering highly sophisticated real-time control of goods.

— To read more about the future of trucking and the kinds of advanced technology and equipment fleets may one day utilize to help them live long and prosper, check out our online feature, Truck Trek (click here).