It is easy to see that the economy has taken a big hit. Countries worldwide are struggling with recession and various ill effects of the global climate. This has, of course, trickled down to impact every type of business. Including, unfortunately, the trucking industry. However, how far do the effects go, and what exactly are they? Let’s take a closer look at how the economy has affected the trucking industry.
The rising fuel costs
The most obvious way the economy has affected the trucking industry is by making it harder to do business because of the spiking fuel costs. The inflation and fuel price forecast for the remainder of 2022 is not exactly looking good. Unfortunately, this is not a problem we can expect will go away quickly. With the extreme fuel prices we are currently facing, the operating costs infringe on profit rates unless the shipment in question is huge and profitable. This makes it harder for everyone in the trucking industry to run their businesses successfully. Which, of course, is causing all sorts of problems of its own. Thankfully, as the essential link in the supply chain, the trucking industry is still relatively protected.
Of course, this does mean that competition between the various businesses has grown. If you think about becoming a truck driver, this might not be bad. With logistic companies trying to outperform each other, skilled employees are very much in demand. You can probably find your place in the industry if you can learn quickly and pick up the needed skills. However, for the businesses themselves, the increased competition is not something that can continue to escalate. Many companies are in a dilemma between having to raise prices to cover the expenses of operation and trying to keep them low to appeal to customers.
Lack of skilled employees
As we’ve mentioned, skilled employees are currently in extremely high demand. Professional drivers with the right skill set are nearly immediately snatched up by competitors that can afford to offer a better salary – leaving smaller businesses desperate to secure talent. After all, a qualified truck driver is skilled at maintaining their vehicle, can handle bad road conditions, and even knows plenty of alternative routes if they cannot use the original due to road problems. And yet, due to people losing their jobs or having to look for a more profitable ones, the number of people looking to become truck drivers has surged. However, as noted by the hiring experts from Michael Brooks Moving, employees in transportation and relocation are loyal and hard-working. Learning the ropes only to switch employers is distressingly common and leaves you to cover training costs while someone else gets skilled workers.
Loss of smaller businesses
From what we have already discussed, it is obvious to see that smaller businesses in the trucking industry are struggling. Despite their efforts, such as finding ways to reduce engine idling time and increase fuel efficiency, the losses caused by the fuel prices are still enough to generate enough complications to slow down operations. This has caused severe disruptions in the businesses that had once relied on them. The close working ties and agreements these businesses once had with their logistics providers cannot easily be replaced by larger logistics companies. It takes time and effort to set up such things properly or one of the parties will suffer a lot of inconveniences. However, this shows how crucial the trucking industry’s role is and why it is doubtful that people working in it will be in financial distress.
The focus on speed
With efficiency and lower fuel consumption being the focus, many truckers now focus on speed above all else. This trend is dangerous and problematic for several reasons. First, and most obviously, it puts a lot of people’s lives at risk. Speeding truck drivers pose a significant danger on the roads, and any accident will cause the loss of many lives. Then, there is the struggle the other businesses have to face. A faster pace also means that everyone else needs to work faster. Warehouse workers need to be better and more efficient at their job, even if this places unreasonable expectations on their shoulders. Businesses involved in production have to churn out their goods faster, which might compromise their quality. And everyone must deal with erratic delivery schedules interspersed with delays and unexpectedly fast deliveries. Sometimes, a speedy delivery is not a good thing if it endangers road safety.
The problems of the supply chain
Of course, the final way the economy has affected the trucking industry is through the floundering supply chain. We’ve mentioned suppliers struggling. And this is growing more and more frequent by the day. The expenses of running a business are not growing just for the logistics companies, which means that many small manufacturers are also facing the danger of having to declare bankruptcy. If this trend continues, and there are no real signs of it stopping, the trucking industry might face an entirely new danger: a growing lack of business due to having no goods to move. Of course, the existent goods will still need to be moved. And if the trucking industry can grow, it has the potential to revitalize some of these smaller suppliers with easier access to materials needed to function.
As you can see, how the economy has affected the trucking industry is hardly positive. The various adverse effects of the current global economic situation continue to worsen. Even the sudden surge in interest in becoming a truck driver doesn’t have an immediate positive impact on the industry. After all, it takes time for such drivers to get enough practical experience to improve and become model employees. However, if we can overcome the current situation, we can expect the skilled driver shortages to at least to be somewhat mitigated. On top of that, the underlying importance and critical role of the trucking industry all mean that, despite the harsh situation, the livelihoods of people in it are safe.
Michael Reeves has been involved with the trucking industry as a manager of a logistics company for over three decades now. He has a lot of experience with the subject, and loves to draw on it to write insightful blog posts.