2017 has officially concluded, and with the end of another year comes another collection of insights and statistics that offer a critical understanding of how our world is changing. For Canadian businesses, 2017 was a year of mixed feelings. Many companies experienced a boom in business from growth in consumer confidence and increased spending in many sectors, while other companies felt challenged by unpredictable circumstances or volatile local markets.

Regardless of which end of the spectrum your company is in, it’s important to take a look back at the logistics data we obtained throughout the year and use it to make key improvements to the supply chain that will drive performance in 2018 and beyond.

These 5 supply chain statistics from 2017 were gathered from a variety of sources, including reports on Canadian domestic trends, international air freight articles, and other sources of logistics data. Each key statistic presents both challenges and opportunities for Canadian businesses, so we feel that it’s extremely valuable to explore each one and leverage the data offered to help influence and guide strategic logistics decisions for 2018 and beyond.

Let’s begin our look at these 5 critical logistics statistics that Canadian businesses need to know.

1 – The Trade and Transportation Corridors Initiative will invest a staggering $2 billion over the next decade in an effort to make Canada’s transportation infrastructure more efficient and effective.

Without investment in infrastructure, the ability for companies to do business within a country becomes increasingly more difficult as time goes on. Infrastructure investment is absolutely essential in order to keep pace with population growth, market demands, geographic obstacles, climate challenges, and technological advancement. With the commitment in place to invest $2 billion in to Canadian transportation infrastructure, Canadian companies can take some comfort with that sign that market growth in Canada is projected to maintain growth well in to the future.

2 – Truck and bus tire manufacturing industry is reporting YoY growth of 9.7% in the OEM market and 3.9% in the replacement market for 2017.

If it rolls on the roads of the world, then it needs tires. The growth in both the OEM and replacement tire markets is mirrored by the substantial growth being projected in the US market for Class 8 trucks, at over 25% in 2018. These increases in demand for both trucks and tires illustrates growth in many other facets of logistics, such as warehousing. Growing truck sales and increasing replacement tire sales point to larger volumes of products being moved from manufacturers to warehouses, and then on to retailers, resulting in a necessary increase in distribution & facility capacity throughout the supply chain.

3 – The global market for warehousing and logistics robotics reached nearly $2 billion in 2016, and is projected to exceed $22 billion by the end of 2021.

Technology continues to advance in leaps and bounds, and the global logistics industry has clearly embraced the benefits of logistics automation and robotics. With the current market for warehousing and logistics robots at nearly $2 billion globally, and with a projection of over ten times growth by 2021, it is unquestionable that those companies who invest in robotics and automation now will be better equipped to thrive in the coming years. Moving in to 2018, automation and robotics technology for logistics should be a major strategic investment for Canadian companies.

4 – Fuel prices increased in Canada during the second half of 2017, from approximately $.85USD per liter to $.95USD per liter. Prices are projected to continue to rise in the first half of 2018 to an estimated $1USD per liter.

Every vehicle needed to transport goods from point A to point B depends on fuel to get there. With gas prices expected to continue rising in to 2018 it will be essential for companies to identify any and every efficiency in their transportation operations and leverage them to minimize costs. With the rapid advancement of prototype trucks that run on alternative fuels, such as the electric versions being developed by companies like Tesla, gasoline costs may very well be less of a factor in years to come. However, for the immediate future, it is clear that oil and gas will continue to be necessary costs of doing business.

5 – Air cargo volume trends see an uptick in Q4 2017, and overall 2017 air cargo is predicted to hit its strongest level since 2010.

It should come as no surprise that delivery speed is an increasingly critical element of logistics operations. Trends in air cargo volumes reflect this fact, as it is being reported that 2017 will achieve the highest level of air cargo demand since 2010, and is poised to continue this trend in to 2018 and beyond. Regional growth in air cargo varies across the world, with Asia/Pacific and Europe experiencing the strongest YoY growth. Key factors influencing this trend include a boost in consumer confidence and strong performance in businesses that utilize e-commerce, capitalizing on an increasingly diverse global marketplace.

Summary

To summarize these statistics, we can see that as Canadian businesses progress in 2018, they will be faced with substantial opportunities to achieve higher levels of efficiency as consumer demand grows and the global market evolves.

  • Canada’s planned investment in national infrastructure will enhance the ability to move goods throughout the country. Companies are expanding their fleet capabilities with new vehicle purchases, which will result in a budget increase for tires and other replacement parts.
  • Warehousing technology, automation, and robotics will rise to the top of many company’s capital expenditure lists in an effort to achieve higher levels of operational efficiency, as well as to meet the technological demands of the future.
  • Fuel costs will continue to be a critical concern as trucks spend more time on the road and travel longer distances, and increasing demand for air cargo services across the globe will most certainly result in cost increases and fiercer competition for resources.

It is essential that Canadian businesses understand the trends that impact their industry the most, and make sure that their strategic plans take these factors in to account in order to achieve long-term success and growth.

We certainly hope that you’ve found this information interesting, and if you have any questions about how 3PL logistics services can help you meet and overcome these challenges, contact our team of logistics experts today.