The spotlight shined on the commercial trucking industry during the pandemic and has
raised awareness of its vital role for many Americans. It was easy to take for granted
that an army of professionals drove 24/7/365 to keep the shelves full and the nation
working. However, when those trucks were shut down, their contribution to the $900
billion industry was readily visible in those empty shelves and shuttered factories.
The Post-Pandemic World
The trucking industry has always been subject to various business cycles. Even
considering that reality, the past four years are unprecedented in the way firms and
drivers have been required to respond to ups and downs in demand and a host of
factors such as:
- Fuel prices and availability
- Prices and availability of new and used tractors and trailers, as well as parts and tires
- Load volume and pricing
- Logistics chain bottlenecks at terminals, distribution centers, and ports
- Inflation and concerns over a possible recession
- Rapidly rising costs of insurance
- Changes in technology
- Increasing regulations, rules, and laws
The unchanging fact is that America needs its trucks and truckers. The challenge for the
established transportation firms and professional drivers is maintaining top quality
service and a culture of safety while surviving financially.
Here are updates on several of the more important issues that will impact the industry
for the remainder of this year:
- Shipping Volumes. The basic issue of supply and demand continues to create uncertainty for the industry. Consumers have spent their Covid checks, and overall retail demand has softened. The question asked daily in all aspects of the economic picture is whether a possible recession will lessen demand further. The balancing act of dealing with inflation makes the issue a hard one to call. However, most industry experts are advising companies and drivers to plan for a rough last half of the year with even lower demand. The good news is that those experts see the market rebalance pointing to a stronger 2024.
- Vehicle Availability and Costs. The unprecedented shortages and pricing situations for tractors and trailers of early last year have slowly shown signs of reversal. The slowdown in shipping demand is providing some immediate relief. At the same time, prices for both used and new rigs are still above pre-pandemic levels. U.S. manufacturers are now predicting they will meet replacement demands by the end of this year. That will still leave a massive backorder for 2024 that will continue to be impacted by parts shortages and the logistics chain snags. This will mean more older trucks on the road for longer service lives. That is also concerning since many standard replacement parts continue to be in short supply. New regulations now in place and expected will add at least $15,000 to $40,000 to new Class 8 trucks over the next few years beyond any impact of inflation. These realities will mean many shippers will find more security with established transportation partners providing fleets running with modern and well-maintained assets.
- Technology from Cab to Cloud. The new ELD requirements that have hit in the last few years was only one fundamental shift in the world of trucking due to technology. That trend is continuing with everything from drug testing to route scheduling to enhanced safety capabilities such as AEB and collision avoidance requirements. While the idea of electrification has been a topic for nearly a decade, it is now slowly becoming a reality. Trucking firms and drivers are seeing more states mandating some form of EV progress in line with the already-passed California target date of 2035. The incentives and regulations are already affecting used and new vehicle prices and will become a major factor within a few years. Fully autonomous fleets are already in test stages in several states and will gain momentum as early as next year with the new government mandates and incentives.
Truckers today must keep their eyes on the road, but also on the many trends and
changes that are reshaping the current marketplace. Wise shippers are also seeking out
transportation partners who have the infrastructure, management, and drivers to
manage these changes and keep their products moving efficiently and safely.