The trucking industry is at an interesting crossroads – and not like the intersections or roundabouts drivers pilot daily to deliver America’s goods.
America’s preferred freight modality is still the commercial truck. While the industry is seeing a lot of business, there are a number of factors affecting prices, demand, and overall efficiency in everything from staffing to logistics management.
In terms of freight demand and good pricing, 2016 was tough, 2017 was better, and 2018 is even better still. This forward progress doesn’t mean each quarter shows drastic improvement, but it does mean progress can be seen from one year to the next.
This year has presented a number of unique challenges. For one, green initiatives continue to change the way carriers think about fueling their fleets. Regulations are pushing freight companies toward electric engines over diesel and giving them greater economic incentive to make a change to one of the most long-standing aspects of their business model.
Speaking of changes to long-standing aspects of business, companies have also been forced to replace their paper logbooks with electronic logging devices per a mandate that went into effect last December. This has put pressure on slow shippers and made traffic jams a bigger issue than ever before. With drivers now unable to fudge their logbooks to make up for unforeseen delays, carriers are facing more regulatory pressure now than in previous years.
But truck pricing has remained roughly unchanged for the second consecutive month. It’s still up for this time last year, showing the type of consistency and slow (but steady) improvement trucking analysts have predicted.
The Bureau of Labor Statistics reports the producer price index rose 0.1 percent in April, though this was short of a 0.3 percent estimate. Cooling inflation pressure offsets this loss, and softer pricing was attributed to general economic fluctuations rather than issues specific to the freight industry.
As demand continues to increase, carriers will face more pressure to combat the growing trucker shortage. Apprenticeship programs have been suggested as a way of getting younger workers into the trucking labor force, and to get the interest of recent graduates who need an immediate career route and only have traditional options like college or trade school to consider.
More demand may be coming than usual after unpredictable winter weather presented problems for some routes. This carry over has led to surges in demand for the trucking industry as well as for other modalities such as rail.
The biggest challenge for trucking companies in the near future will be keeping up with steadily rising demand while trying to fill their rosters in the process. A lack of truckers to match the increased business improved pricing could bring may result in a slump during the later part of the year, with rising prices for shippers, and even for consumers, if the shortage is bad enough.
As of now, trucking is focused on roster growth as well as lining out determining whether federal or state regulatory bodies should have more control over making rules for their field.