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Freight as a Service Revenue will Reach $900B in 2030

Disruption is coming to the traditional freight and parcel delivery sector, enabled in part by the Internet of Things (IoT). Freight as a Service (FaaS) will represent 30 percent of total goods transportation revenues by 2030, according to the latest worldwide market study by ABI Research.

The benefits of FaaS -- which are similar in concept to Mobility as a Service (MaaS) -- include cost reductions, resource utilization improvements, and new convergence via the adoption of a 'sharing economy' business model.

FaaS streamlines freight and parcel delivery services through new advancements in cargo marketplaces, on-demand transportation, freight brokerage, and ride-sharing. With emerging IoT applications fueling its current growth rate, FaaS revenues are already on track to exceed $900 billion by 2030.

FaaS Market Development Opportunities

"With an average global air cargo Freight Load Factor of as low as 44 percent and a structural 20 percent long-haul truck cargo capacity utilization deficit in the U.S. market, the freight industry needs to act," said Dominique Bonte, vice president at ABI Research.

According to the ABI assessment, the legacy last-mile freight delivery segment of the market will experience the largest upheaval, due to the rapid adoption of e-commerce and the need for faster, cheaper, on-demand delivery through new transportation modes and technologies.

Case in point: Uber already offers the UberRUSH and UberEATS delivery services and recently invested in truck platooning startup Otto. The broader transportation industry is also testing drone-based delivery with companies such as Amazon, FedEx, Flirtey, Google, and UPS all exploring the method.

Audi and Daimler, both partnering with Amazon and DHL, are utilizing telematics technology to test direct-to-car delivery, and Volvo has already launched a commercial in-car delivery service within Gothenburg, Sweden.

Meanwhile, Daimler and Workhorse are considering hybrid models -- integrating autonomous vehicles, drones, and/or robots with smart home technologies. The apparent goal is to apply these technologies to provide the end-to-end delivery of parcels inside homes and commercial sites.

Outlook for Transportation Automation

However, looking ahead, commercial transportation efficiency improvements can be taken to yet another level by leveraging combined synergies between the FaaS and MaaS business models.

As an example, re-purposing excess MaaS capacity of driverless vehicles or shuttles during off-peak hours for freight transport and delivery will extend the sharing paradigm across people and freight transport to achieve ultra-high levels of asset utilization.

"Both FaaS and MaaS are seen by governments as strong engines for economic growth," concludes Bonte. "As such, governments need to move forward with new legislation to allow for the deployment of new delivery technologies like UAVs and create frameworks for the underlying service business models."

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