The consumer/retail industry generates roughly two-thirds of U.S. GDP and drives significant freight volumes, Stifel Nicolaus' David Ross explained in an e-mail to investors summarizing the takeaways. "Overall, our view is that renewed focus on inventory productivity and e-commerce should lead to growth for trucking and B2C carriers," he says.
For many retailers, there is an increasing focus on lean and productive inventories, which Stifel Nicolaus believes is good for trucking and third-party logistics providers. "Excess inventory stock often requires promotional events that are damaging to margins and may cause consumers to question the underlying value of regular-priced products," Ross explains. "At the same time, insufficient inventories can undermine a retailer's reputation and force consumers to shop elsewhere, if their needs cannot consistently be met. Faster supply chains are one solution to the problem but may involve higher costs."
Another increasingly popular solution is for retailers to limit the number of SKUs (stock-keeping units) they carry at brick and mortar locations, allowing greater shelf space for more popular items, and using their websites as alternative storefronts with an expanded number of SKUs. As traditional retailers grow their online businesses, it means more business for trucking operations that deliver direct to the consumer.
"While eCommerce is by no means a new phenomenon, several companies at the conference noted that it was growing faster than ever," Ross says. On top of the inventory concerns, the popularity of smart phones and tablets, the increasing availability of free or low-cost shipping, and wider use of scannable QR codes for competitive price shopping are also contributing to this trend.
Ross also noted that many U.S. companies are focused on growth in international markets, which could be good news for international carriers, freight forwarders and customs brokers. Another trend, he said, is that high fuel costs could lead companies to look more at fleet outsourcing instead of private fleets.