Thanks to concerns about tariffs and geopolitics, Forrester clients are expressing a keen interest in the impact of technology on fulfillment. You might have seen that we wrote about the rediscovery of route optimization and the emergence of transportation grids in earlier research.

But now our clients ask: 1) Are parcel freight and less-than-truckload (LTL) still the fastest-growing transportation modes? 2) Can technology help to manage trade volatility? 3) Should I insource or outsource fulfillment?

The Surprising Growth Of FTL Freight

For years, we’ve been tracking a trend in warehousing and transportation from pallets to parcels and publishing a parcel forecast. But surprisingly, direct full truckload (FTL) freight is gaining ground over consolidated less-than-truckload (LTL) freight because of changing market factors and the increasing influence of technology.

The Freight Market Swings To FTL

FTL freight is growing faster than LTL and parcel. To be sure, the changes in de mininimis rules play a part, but other important factors favoring FTL include:

  • Speed and predictability. FTL shipments go directly from origin to destination. This appeals to manufacturers working to strict delivery deadlines. High-tech pharma, food and beverage, and retail brands also value FTL freight because it reduces time to market and product obsolescence risk.
  • Reduced handling and risk. You load and unload FTL freight once. That means less risk of damage, loss, or delays when transferring between hubs and vehicles.
  • Rising costs and complexity in LTL. LTL freight cost and reliability are vulnerable to driver shortages and terminal congestion. Consolidated LTL requires more coordination and longer lead times. We noted in this research that companies like packaging giant Georgia Pacific already use AI platforms from vendors like Clear Metal to predict the movement of goods, precisely because of freight consolidation and dispersal latency.
  • Evolving shipment profiles. As businesses scale, they typically ship volumes that justify a full truckload. While they may use LTL to explore a new market, they usually switch to FTL once they reach a viable volume of trade.

Technology Reduces FTL Friction

Changes in global trade volume and patterns favor growth of FTL shipping. But judicious application of new technologies also plays a role in the growth of FTL freight. Savvy shippers :

  • Deploy real-time visibility and tracking. Advanced telematics and GPS systems offer the FTL shipment tracking that is critical for high-value or time-sensitive freight. Hence the enduring popularity, despite the ubiquity of yard slotting and ASNs, of IOT and in transit ‘visibility’ platforms like Project 44 as we noted on research before.
  • Make use of freight marketplaces and on-demand booking. Platforms like Uber Freight, Convoy, and others enable shippers to compare rates, check availability, and book directly.
  • Engage route optimization and dynamic scheduling. AI-infused tools analyze traffic, weather, and road conditions to identify the most efficient routes, saving fuel and time.
  • Exploit predictive analytics and demand forecasting. Machine learning models forecast demand spikes enabling smarter consolidation decisions—or a calculated choice to opt for FTL.
  • Embed automation and integration. APIs and cloud-based Transportation Management Systems (TMS) coordinate pickups, deliveries, and load details reducing administrative latency.

So, while LTL still has its place – for smaller, non-urgent shipments -, the pendulum is now swinging toward FTL, when speed, security, and simplicity matter most.

Can Technology Help Me Manage Trade Volatility?

Changing patterns of trade help to exploit new manufacturing technologies and can boost resilience, sustainability, and agility in the face of changing customer demand. But now we have geopolitical factors demanding supply chain diversification and more stakeholder attention to the potential impact of tariffs. This means that enterprises differentiating on customer service, should now undertake the processes like customs filings and settlements that they previously delegated to freight forwarders.

Should I Insource Or Outsource Fulfillment?

Years ago processes like customs clearance demanded personal presentation of paper documents. New technologies like digital customs portals and in transit tracking, simplify managing your own transportation and storage contracts and even making your own customs declarations and remittances. But in the end it’s down to the value proposition for your customers. If you compete on price, it makes sense to outsource, pooling resources and facilities with other companies. If you compete on service, complete ownership of the fulfillment process and supporting applications like WMS and TMS though costly, are core to their brand promise.

We look forward to hearing your point of view on in-sourcing or outsourcing! If you are a client and want to discuss more, then please schedule a guidance session or inquiry.