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IT and Telecom Spending Trends Within the U.S. Transportation and Warehousing Services Markets
Frost & Sullivan, Dec 2004
Rise in Fuel Prices Compels Participants to Streamline Operational Costs
The transportation sector has been impacted on a large scale by the recent rise in fuel costs resulting in mounting operational expenses. Related segments such as the ground passenger transit have also been affected by the escalating fuel value. Most industries have combated the price upswing by increasing prices of end-user products and services. However, over-capacity within the airline industry has restricted the use of this strategy amongst airline companies. Another reason for increased operational costs is the deployment of additional security measures following the rise in terrorist threats. These factors are compelling transportation companies to streamline operational costs, thus leading to a significant investment in information technology (IT).
This Frost & Sullivan research service provides an in-depth analysis of the IT and telecom spending trends within the U.S. transportation and warehousing services market. It includes information on technology spending trends, drivers, and challenges to enable better understanding of the market scenario. The study also offers industry and business wise segmentation along with the breakdown of telecom services spending.
Efforts to Lower Operational Expenses Boost IT Deployment
As costs increase and competition intensifies, participants in the transportation sector are striving to lowering operational expenses through IT solutions. Automated and Web-based solutions are emerging as useful tools to cut back on staffing expenses. In such as sectors such as trucking, increasing customer demands are leading to the implementation of radio frequency identification (RFID) to enhance inventory-handling operations. Such solutions are also finding their niche in customer care. For instance, passenger transit services are offering services such as online reservation systems, e-tickets, and interactive voice response systems (IVRs).
Organizations with multiple business interests, such as the Port Authority of New York and New Jersey, are also using IT-enabled systems to effectively manage resources across businesses, observes the analyst of this research. These solutions are used by transit authorities in applications that range from the implementation of EZPass toll collection systems to complex transit planning/scheduling applications.
IT Adoption Set to Restructure Transport Sector
Budgetary constraints had been stalling rapid deployment of technology in the transportation sector mostly affecting smaller participants, especially in the trucking segment. However, this trend has been changing as companies aim to minimize asset utilization. Despite the inability to reduce overall operational expenses, companies are cutting down costs of administrative, marketing, and communication functions.
For example, logistics service providers like United Parcel Service of America, Inc. and Federal Express (FedEx) have been implementing Web-based shipping solutions for their clients in the online retailing market, says the analyst. Commercial freight carriers are employing IT/telecom technologies to improve fleet management activities.
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