FleetNet America and the American Trucking Associations’ Technology & Maintenance Council collaborated on a benchmarking study that found a continued increase in the average cost of mechanical trucking repairs. Costs rose in the industry for the second quarter in a row. The Truckload Vertical Benchmarking Study covered events in the fourth quarter of 2018.
As you prepare for the New Year, it’s important to take a close look at the trucking industry outlook for next year. Areas including freight rates, shipping capacities, and truck orders indicate a booming and in-demand industry. Take stock of where your trucking company can expect growth in 2019 and where you need to adapt for the year ahead.
Cargo theft is nothing new to supply chain professionals as thieves continue to utilize new and adaptive ways to steal freight. According to National Retail Federation’s 14th annual organized retail crime (ORC) study, 92% of retailers that were surveyed acknowledged having an ORC within the last year (29% stating that they occurred during the supply chain process) and 71% found the problem to be increasing.(1) According to retailers, the digital environment is making it easier and easier for thieves sell stolen goods and that harsher penalties need to be enforced for cargo theft, with 73% of surveyors believing that there should be a federal ORC law in place.(1)
According to the American Trucking Associations, the industry is short nearly 63,000 drivers with that number expanding to over 270,000 for the entire Class 8 truck market according to FTR Transportation Intelligence.(1,2) Capacity tightened this year with enforcement of the ELD mandate in April and is expected to worsen by 2020 when carriers must comply with the online driver drug testing database.(3) Within the next 10 years, the industry is expected to be short 890,000 drivers.(4)
There's no doubt that trucking is a busy industry right now, but what do you make of the conflicting reports that are coming out? More shipments, fewer truckers, more trucks: it's a bit difficult to sort it all out. Here's a quick look at a couple of stats that came out recently along with our take on what's actually happening in the market.
Last Thursday, Reps. Rick Crawford, Sanford Bishop, and Bruce Westerman introduced the Honest Operators Undertake Road Safety Act (HOURS Act). If passed, the Act would provide changes to the hours-of-service regulations, allowing drivers more flexibility, especially those running short-hauls. Here are some key sectors that would be affected:
Companies such as Hasbro, Kellogg, and Tyson Foods have been in the news recently speaking on the impact that higher freight costs are having on their bottom line, with Tyson’s CEO Tom Hayes noting that the company’s shipping costs are expected to grow by $250 million this year. In fact, according to DAT Solutions, the cost per mile for spot rates is up 29% year-over year and tightened capacity is definitely one of the culprits.(1)
Imagine docking your trailer at a shipper’s facility, asking to use the restroom while you are waiting, and being denied. Better yet, imagine being told to go relieve yourself behind your own trailer “like everybody else does,” by one of the employees. So was the case a few years back when one driver made headlines for the treatment he received at a food packaging facility. The facility later told the driver that they would be changing their policy within the next month to allow drivers to use their facilities’ restrooms.
Freight rates continue their climb north in a year that has already shown a 28% increase in trucking spot quotes from Jan. 1st through March 23rd, according to a Bloomberg report. But the higher prices in freight transportation (and ultimately consumer goods) should not be unexpected. The northeast, for example, was embraced with three Nor’easters within the first two weeks of March, with seven of those states getting hammered with over 20 inches of snow, shutting down roads and hampering businesses.
Just as it is now quite possible for an airliner to fly with no human intervention, the prediction for the not-so-distant future is that vehicles will be able to ferry passengers to their destinations with no hands on the controls. The future has arrived in limited form; drivers are now able to take their hands off the wheel as vehicles efficiently maneuver themselves into tight parking spaces. While full automation is on the way, however, complete autonomy of vehicles is still a way off.
Drivers have yet another reason to loathe detention time at docks. According to a study recently released by the Department of Transportation, which analyzed over 104,000 crashes from 2013, just a 15 minute increase in detainment at a shipper/consignee’s dock, led to a 6.2% increase in crash risk. (1) This equates to an additional 1 in 1,000 trucks having an accident and nearly 6,500 additional crashes a year. (1,2)
Driver Shortage: Driver capacity is at its lowest since 2005, with a ratio of one truck being available for every 12 loads so far this year, according to DAT Solutions. (1) With the ELD mandate taking effect last month, drivers retiring and the struggle to recruit the younger generation, as well as government regulations such as hours-of-service, the American Trucking Associates reported that the industry will need nearly 900,000 additional drivers to satisfy demand. (2) This capacity crunch has caused many shippers to either delay shipments or pay more to get their freight moved.
After much struggle from within Congress, President Trump's massive tax reform bill successfully passed. Though it's unclear exactly what effect the bill will have on individuals at this point, many industries are hailing the milestone legislation as a boon to the economy and their own businesses. Starting in 2018, the impact of the largest overhaul of the country's tax code in 30 years will be felt. Some highlights -- as they pertain to truckers and the trucking industry -- are noted below.