The wheel’s invention has propelled civilization development to exponential feats and gave way to other technological advancements. In olden times, the wheel has been used to transport people and products from one settlement to another. The creation of wheeled vehicles helped increase the speed at which countries trade products, services, and food. This economic activity helped civilizations develop, expand, and provide a comparative advantage to neighboring countries. Ancient settlements were able to conduct long-distance trades where sellers could bring their goods to different places and were not confined to their cities.
Fast-forward to modern times, these trade routes are now trudged on by modern transporting methods by trucks. Trucking industries help the economy by moving materials, goods, and other products to different parts of the country. Before the trucking industry idea, people make use of horses with carriages or trains to transport freight around. Motorways going in and out of states are inundated with vehicles used for heavy freights carrying cargo from coast to coast. Since the beginning of freight transport through horse-drawn carriages, cargo deliveries have become more popular because of its flexibility and affordability.
Now, the trucking industry is responsible for providing 5% of full-time jobs in the United States. They are also responsible for moving at least 72.5% of the country’s freight in 2019, which could easily translate to 11.84 billion tons. In 2017 are 36 million truckers registered for business use, which does not include those used by the government and used in farms. This roughly translated to $796.7 billion in gross freight revenues in initial shipments from cargo, representing 80.3% of the nation’s freight bill in 2018. When we say the trucking industry, we talk about the performance of semis, trailers, and light trucks that transport goods across the United States from the manufacturing plants to distribution centers and their other locations.
The market has been a big pillar in the economy as the primary choice in moving products since it is more practical and flexible than trains and wagons. Powered by fundamental changes, e-commerce allowed cargo and freight logistics to work and grow at an unprecedented pace.
Over the years, the trucking industry trends had gone through tremendous changes in how they operate and the type of vehicles that make the deliveries to market spaces. There are ups and downs in the industry, which have impacted the production and development within the market. There have been a lot of things that have influenced the way the industry has functioned, and various elements have altered the way work is done within the industry. Before 2020, look back at how the freight market has changed over time and see how the pandemic impacted it.
In 2015 the shortage of drivers escalated with 45,000 drivers needed in the freight sector.
In 2016 freight volumes alleviate somehow that allowed the shortage to fall back to 36,000 drivers needed in the trucking market.
Trucking Industry Faces Weak Freight Demand into 2017. There has been a continuous decline in the freight rates hauled each year, especially with the talks of recession, but the biggest concern that this industry is driver retention which surged through the roof in the first half of the year. Drivers have raised concerns about having a safe place to rest, and the lack of available and secure parking. Without finding the perfect safe parking for themselves and their cargo, the drivers are forced to drive longer than the allowable hours of service, which bring more problems for the tired driver.
Truck manufacturers are laying off employees, and the carriers are canceling their orders for trucks, shipping rates and volumes are flopping. With all these, it becomes a challenging environment for the trucking market. The fall in the factors had dragged the business down, sinking demand, excess stock, port bottlenecks, capacity overload, the increasing driver shortage, stricter regulations, and more.
The general economic ventures slowed down in the first half of 2017. Some of this year’s issues were overflowing inventory, and the struggle to get out caused downside for the freight market. The economic status became not ideal due to gross domestic product growth that barely reached a reasonable condition.
Driver shortage increased, and about 50,000 drivers were needed. A freight tonnage of 70.6% moved on national highways. Several factors that created the scene was due to demographics, lifestyle, job options, laws and regulations by state, technology, thigh turnover rates, etc.
This is the year where the lack of drivers spiked to an all high of 68,000, which caused a mad scramble to find, recruit, and retain drivers. Among all the transportation segments, trucks, and busses, the main leads in the technology and investment advancements from suppliers to original equipment manufacturers. According to OICA, there was an increase in trucks and buses’ production, an indicator of the rising demand for freight and transportation.
In 2018 trucking, there was an increase in shipping activity. It also showed that there was an increase in the demand for freight. This has impacted the revenue for fleet operators. But, the increase in the revenue resulted in the rise in the driver shortage, and the need for wage increase and fuel price hike. Unstable fuel prices, driver shortages, freight rate increase, and the shortage of cargo capacity were the trucking industry’s challenges. Those challenges have influenced the industry trends this year, which included vehicle platooning and electric trucks.
- Truck platooning – is connecting two or more trucks in a series using connectivity technology, auto driving, artificial intelligence, and support systems like adaptive cruise and lane-keep control. The truck acts as the leader of the platoon and the vehicles behind follow to the leading truck’s movement.
- Electric trucks – help meet the emission limits for carbon dioxide and lessen the increase in the price hike of trucks. Hence, a lot of trucking companies invest in eclectic vehicles. Experts project a rise of 10-15% of truck sales by 2025.
There was a prediction that the American trucking industry will start to slow down as it gets affected by the economy. Experts say that the economy is not looking as good as the previous years, and nationwide changes may prove troublesome. The Law of Supply and Demand is still the best way to explain why the trucking economy continues to slump down. There will be lesser demand for drivers because of lower demand for truck drivers by factories, retail companies, and construction firms. This was evident when the trucking loads were down to 50% by June, which can be interpreted as fewer demands for the trucking companies who employ these drivers.
Still, the industry’s number one challenge is the lack of workforce, and the rise of competition has brought the prices down, leaving a minimal margin for profit. This is what has been called by far the worst year for truckers due to the overcapacity and low freight demand and contractual intermodal rates. This diminishing demand for freight caused a carrier to cool down, leaving over 600 trucking companies to close by mid-year.
2019 can be a lesson that trucking markets can bog down just like the economy resulting in a period of contraction.
With the growing competition in the transport sector, the trucking companies within the industry should utilize new technologies and improve their services’ quality to remain competitive in the business. The key to a successful business in the transportation sector is to offer the most cost-effective, flexible, and efficient services. Hence, companies should turn towards the most up-to-date trends in the trucking market. Getting into an e-commerce strategy is the best option.
Before pandemic, many predicted that the trucking would not pull out of this recession, not until the latter half of 2020. There is an upswing in the new trends which benefit both carriers and shippers alike. It has been said that it will be a stable partnership, and the industry should see improvement.
However, instead of recovery, analysts believe a rising risk of recession will undoubtedly affect the whole trucking industry. But still, everyone is looking up even though no one is really sure what the new normal is going to be.
Over the years, the freight service and logistics industry had experienced profound changes considering the operations and kinds of vehicles they used to make their way to the market spaces. The trucking industry had been in the downturn since 2018 or early 2019, but the Coronavirus survey crashed a critical outlook to an all-time low, which can be scary for the economy. Aside from the freight business, truck drivers employed by small companies or have their businesses face huge worries.
With the increasing expenses of transportation companies, they should work with new strategies to improve efficiency. In the world of cargo, freights, and logistics, everything should function smoothly since a mistake will affect cargo freight companies’ operation and interaction around the globe. To reduce cargo operations time delays, and the freight service to run effectively, activities should not be delayed, and freight companies should make sure to work with essential methods.
Trucking industry trends point to where the rest of the economy is headed. It is known to be the leading indicator of where the economy is heading. Hence, it is vital to stay on top of the trucking industry trends and news. It will help you understand what is going on and what will come and the possible things to happen. Following relevant new trends will help the company in creating effective methods.