In 2018, 310 trucking companies had closed their doors. 2019 surpassed that number by over double in just the first half of the year alone, with 640 carriers going out of business. (1) This number equates to nearly 20,075 trucks being removed from the road and over 3,000 drivers left unemployed. (1,2) Here are some of the reasons trucking companies are struggling this year:
Texas A&M Transportation Institute published its 2019 Urban Mobility Report this month, reflecting the growing issue of congestion on our nation’s roads and just how much it is costing Americans. Here were the key takeaways: (The following can be found in the full report available at https://static.tti.tamu.edu/tti.tamu.edu/documents/mobility-report-2019.pdf)
Those in the trucking industry have become all too familiar with the hours-of-service regulation, which allows drivers 14 hours on-duty a day with 11 of those hours consisting of driving time. They must then shut down for a 10 hour break regardless of where he or she is at, which makes detention an even stronger issue within the industry, eating up a driver’s time and often leaving them stranded as they wait to be loaded/unloaded. With electronic logging devices now in effect, drivers and companies must strictly adhere to the rules or else face citations/penalties. But all that may change.
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.