If the last few years have proven anything to trucking industry analysts, it is that it is difficult to predict the future. From the surprises introduced by Covid and massive supply chain disruptions, to unexpected hikes in the cost of fuel, to the passage of a massive infrastructure bill, forecasts going into 2020 left the industry lacking.
Attempting to Prepare
Nonetheless, it is important to gather as thorough an insight as possible for the coming months to prepare and retain some flexibility in planning. The post-pandemic recovery also left questions about lingering and ongoing effects of this historic event. Looking at 2023 identifies a list of interrelated issues and challenges that will continue to create uncertainty in the commercial trucking industry. Below are 9 top issues we summarize as discussed by industry experts:
- The Recession Cloud. Many experts expect a major economic downturn in the coming months, with a severity up to and including a recession. While such a possibility is concerning, it is not necessarily Doomsday. The U.S. has weathered 12 such periods since WWII and experts see this as a necessary outcome of the current levels of inflation and global economic stresses. While a slowdown will affect overall shipping, there is little concern that total freight traffic will be significantly impacted due to the lingering shortages being fulfilled.
- Industry Consolidation. The ongoing bankruptcies and acquisitions/mergers in the industry are both a cause and effect of the various factors discussed here. Retail firms are shipping fewer goods and the logistic chain issues are compounding this issue. The pressures have resulted in several larger and many smaller trucking firms to leave the industry, resulting in the loss of more than 3,000 truck driver jobs. Additional consolidations are expected in the coming months and the severity will be determined by overall market conditions.
- Technology Integration. Like it or not, truckers are increasingly encountering new technologies in all aspects of their industry. From route planning to safety compliance and dozens of other ways technology is increasing productivity, adding new constraints, and providing new ways of getting the job done.
- Shifts in Production Locations. The nation’s transportation framework is being reshaped in many ways, including the location of primary production facilities for truckers in the new environment. Companies providing reefers, dry vans, and flatbeds are rethinking their facility locations, affecting the overall supply and demand of equipment.
- Market Cycle. Truckers operate with a business cycle within the national and global business cycles. Many believe 2023 will see some relief for the industry as it moves more into an upcurve for its latest cycle.
- Fuel Costs. While there has been some relief in mid-2022, the issue of fuel costs will continue to dominate the daily costs of operations for all aspects of the trucking industry.
- Data Analytics Utilization. A corollary aspect of technology integration, the integration and use of massive volumes of data are behind many of the decisions made daily that affect drivers, from load planning to routes to scheduling.
- Infrastructure Enhancements. The benefits and challenges of major infrastructure investments in all fifty states are now being felt and will be in full swing by 2023. Thousands of miles of roads and bridges will be impacted, and this work will require constant monitoring of delays and detours.
- Evolution of E-commerce. The pandemic was catalytic in driving a major push for e-commerce and related increases in shipping. The type and form of shipping from distribution centers to last-mile deliveries are aspects that warrant scrutiny in 2023.
It is easy to see why effective forecasting is so difficult in this challenging environment. Each of the above factors, as well as others not addressed here, work together in a dynamic manner to present a variety of impacts on the commercial trucking industry. Flexibility is the essential requirement for the coming year.