As 2019 quickly approaches, here are five things you should be aware of in the trucking industry for the upcoming year.
1. The Driver Shortage is Ongoing
There are still not enough people to drive trucks. A lot of them want to stay closer to home and many of them are retiring. Fewer young people are choosing trucking as a career, especially if they are being asked to drive long distances and be away from home for days or weeks at a time. While that does not mean significant problems for most companies, it does mean that some companies are reducing the size of their trucking fleets and/or choosing to hire outside trucking companies to complete shipments and deliveries. The National Transportation Institute recorded greater driver pay increases in 2018 than any prior year and Stifel expects a 6-10% year-over-year driver wage growth. (1)
According to the American Trucking Associations, the industry is currently short over 50,000 drivers with that number expected to rise to 175,000 by 2026. (2) While the DRIVE-Safe Act, which would have allowed 18-20 year-olds to operate interstate, didn’t make the cut this year, it is said to be reintroduced next year and can help alleviate some of the burden of the shortage. (3)
2. Automated Vehicles Are Not Taking Over – Yet
The idea that automated vehicles (AVs) are going to take over and that all of the remaining truck drivers will be out of a job is unrealistic. There are some AV creations being tested by companies and eventually there may be self-driving trucks on the road to some degree, but there will always be a need for truck drivers in the foreseeable future. In fact, according to McKinsey & Company’s report on the future of commercial AVs, “Autonomous commercial technology and connectivity could add $3 billion in profit to the truck industry by 2030.” (4)
3. More Hazmat Drivers Are Needed
Diving down deeper into the truck driver shortage is an even greater need for hazmat certified drivers. Factor in the cost of becoming certified, increased pay for those drivers who carry this endorsement, and greater scrutiny during roadside inspections, many companies are foregoing their ability to haul hazmat materials altogether while others are raising transportation costs on these types of shipments. (5)
4. Diesel Costs Are Going to Be Higher
Fuel prices rarely drop, at least not for long. It appears that 2019 will be no exception to that rule, with the cost of commercial vehicles going up along with the price of diesel to fuel them. In January of 2020, the International Maritime Organization (IMO) regulations on sulphur are set to take effect. Because of that, there are different ways that diesel has to be processed. Those new requirements are going to raise prices for the diesel that goes into trucks, as well as into ships. With higher demand for "sweet" crude oil and the need to adjust refinery equipment, 2019 could be a very expensive year for diesel.
5. CSA Scoring Changes
By September 2019, the Federal Motor Carrier Safety Administration plans to roll out changes to the CSA program that would alter its scoring method, which is currently weighed by seven safety violation categories, to “a safety culture score, that will look at 66 so-called violation groups that exist in CSA.” (6) The new system will use Item Response Theory which will “look for patterns and assign weights and priorities” across the industry, lessening the severity for those carriers who only have marks in one or two categories.
The biggest thing to remember for 2019 is that the right trucking company can make all the difference when it comes to having a shipment delivered successfully, providing not only value, but also quality, security, financial savings, and peace of mind for 2019 and beyond. Visit www.roadscholar.com to see what we can offer you.
For more news on the Trucking Industry Outlook for 2019, click here.