The growing trade activities and the introduction of new technologies in trucks are the key factors driving the North American road freight transport market
September 10, 2018: The road freight transport market in North America is expected to reach over USD 900 billion by 2023, as per a new report published by Mordor Intelligence LLP. The market is expected to grow owing to factors, such as the growing consumer demand for goods leading to an increase in the trade flow, and the North American Free Trade Agreement (NAFTA) that facilitates the tariff-free flow of goods. Besides these factors, the adoption of advanced technologies in trucking, as well as in the management of transportation and supply chain, is also expected to reinforce the growth prospects over the forecast period.
NAFTA is a very significant factor in driving the trade between these countries and is pivotal in making them the largest trading partners for each other. As of 2017, for the United States, Canada is the second largest trading partner of goods and Mexico is the third. The imports of the United States from Mexico was increased by 687% whereas that of the exports increased by 484% in 2017, when compared to 1993 (before NAFTA). Additionally, the agreement has led to an increase in the investments resulting in the growth in the business activities. For instance, the Foreign Direct Investment (FDI) of Canada has grown by 15.3% in 2016 when compared to 2015, and has reached USD 371.5 billion mainly led by manufacturing, wholesale trade, and finance/insurance.
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A strong growth is anticipated in the freight demand in the United States, in the foreseeable future. According to the Bureau of Transportation Statistics (BTS), the total freight transported domestically by trucks is expected to reach 14,235 million metric ton by 2045 from 10,568 million metric ton in 2015. Trucking is the dominant mode of freight transportation in the United States and accounts for ~70% of the freight transport (in terms of weight). Apart from these, the shortage of drivers, due to aging and retiring, is resulting in the widening difference between the supply and the demand in the US trucking industry. This capacity crunch is leading to the rise in prices.
The rise of the emissions is leading to the shift in focus from the road transportation to other means of transportation, such as rail and intermodal, which are comparatively low-priced. Additionally, road congestion remains to be one of the critical factors influencing the modal shift. These factors altogether restrain the road freight transport market in North America. The intermodal container transport is gaining momentum in the recent years with almost 60 million drayage movement every year being contributed by North America.
Key Insights from the Report:
North America Road Freight Transport Market Segmentation Based on destination, Service Type, Regional Coverage, and End Users.
North American Road Freight Transport Market Segmentation, by Destination
North American Road Freight Transport Market Segmentation, by Service Type
North American Road Freight Transport Market Segmentation, by Region
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