The e-commerce market is expanding its trucking industry trends. Correspondingly, it continues to expand to the number of $3.2 trillion by the year 2020.
These trucking industry trends are considered as a great idea for other industries as well, not only the transportation. However, it seems to represent a major problem for the freight market.
In addition, there are shippers who are looking for ways to keep up with the latest and constantly changing trucking industry trends.
The fact is, they reflect on the entire industry. Starting with the shippers, the logistics providers, truckers etc.
In order to achieve on the market in your industry, you need to take massive and extensive steps in order to become a leader.
For example, it is crucial to consider the following services:
- Full truckload
- Less than truckload (LTL)
- Small package
- Last-mile delivery
Due to the upcoming trucking industry trends, transportation is entering into a new era with a potential to become stronger than the previous.
According to DAT, the shipping will robust in this year. Having said this, here are the important trends to implement in your business plan for 2019.
1. Capacity Crunch
The trucking industry is experiencing a low truck supply but a high demand for freight. One of the main reasons why is this happening is the driver shortage.
Each year, the older drivers are retiring and there are very few younger drivers left to take their place.
This is mostly due to the difficulty of the occupation. In addition to this, there are a lot of factors involved here:
- Hours of Service (HOS)
- Driving OTR – Over the Road
- Balancing Highway and Home
- Average Driver Pay
This shortage of drivers means that there will be few trucks on the road transporting freight. Consequently, this will worsen the economy and other industries.
It is like a fall from a high altitude – the trucking industry is pulling down the rest of the industries together.
The Factors Affecting it
Moreover, besides these regulations, there are the electronic logging devices (ELD) which highly impact the drivers.
According to the ELD mandate, every motor carrier must install an electronic device in their trucks so that the hours of service are automatically tracked.
In addition, the law states that drivers are allowed to drive for 11 hours only while having a 10-hour rest on a daily basis.
Prior to the mandate, most drivers kept manual log books to track their hours of service, while some of the larger carriers already had ELDs.
Most of the smaller carriers have complaints on the ELD, however, there are those having issues with the cost. The others dislike the fact of someone having them tracked down.
The rest probably has issues with the installing process which is why it is good when someone knows how to install a hardwired device.
Regulations such as these are implemented with the intention of creating safer roads.
However, they are also perceived by drivers because a lot of them consider that their trucks will be away from home.
2. Rising Rates
There were rates rising in 2018 and will continue to rise in 2019 as well. The rates go straight proportionally with the capacity crunch.
To continue with, as the freight demand rises the rates rise as well but mostly to the supply fall.
In other words, there are 2 types of rates in the trucking industry: spot market rates and contract rates.
To emphasize, the spot rates are those that are quoted on the spot and are typically done for freight that is ready to move.
On the other hand, the contract rates are those that are locked in with a carrier via contract with the shipper and are usually based on a year-long estimate of freight volume.
It is predicted that the rates will stabilize but as long as capacity is tight, the rates will continue to rise.
The increased rates known as one of trucking industry trends are probably the great transition from highway transport to rail freight.
Intermodal rates are usually less expensive due to the nature of the mode. Due to this matter, there are shippers who switch to intermodal in order to decrease rate issues of the highway.
3. Trucking Industry Trends Technology
Each year there are new technologies breaking into the world of trucks. There are companies which are launching apps that ease the job of the trucking industry and drivers as well.
To put in another way, there are companies helping other trucking businesses by also offering on-demand freight apps.
These apps usually help them by matching their companies with shippers on the market. In this way, they can easily succeed in the market share.
Continually, there are applications which have limited geographic use, however, there is a high growth potential.
In addition, the shippers are embracing any solution that will provide them with an ease of the job. Further, carriers are also embracing the platforms which offer them a higher and a faster payment.
Another potential growth is the autonomous vehicle. There are companies which use technology to create electric semi-trucks. These trucks usually have 500 miles range.
Companies are making pre-orders which shows the large interest in the technology.
By using electric vehicles company owners will no longer have to pay for fuel. Notably, this is one of the important trucking industry trends to transportation companies.
Companies are usually into the new technology because they want to show their customers they cope with the latest trucking industry trends.
Moreover, they show no ignorance of the innovative technology which may be the new era of trucking.
4. Changing Behaviors
It is strongly noted that shippers and carriers need to be flexible when it comes to shipping. There are individuals who are changing their behavior to avoid bad situations.
With this in mind, shippers are usually changing the behavior in order to increase the reputation among their clients.
On the other hand, the demand of supply also leads them to be selective with their business clients.
This is realized by carriers as a significant increase in the business because they see it as a strategic choice.
As an illustration, the company may maintain a behavior like this to avoid making drivers wait.
In particular, in transportation time is money. Therefore, the quicker the loading the better for the companies and carriers.
5. Freight and Trucking Rates Will Evolve
In addition, it is also noted that the trucking rates will continue to evolve. Together with this, the shortage of truck drivers will worsen which will put pressure on the capacity crunch.
The obvious solution here would be to increase the rates. However, carriers are still hoping that the autonomous vehicles will provoke low-cost solution as trucking industry trends.
Looking on the negative side, the autonomous vehicles still remain in infancy. The thing is, there is a very small number of these vehicles. Increasing the number is yet far from realization.
However, this is not stopping some on the market to ease the lives of the citizens. For example, Tesla is planning on increasing their autonomous vehicle production to 500 vehicles.
The main reason for the autonomous trucks is the increase in diesel costs. Initially, the consumers aim at low price products which may destroy their engines.
The thing is that the autonomous trucks may be one of the latest trucking industry trends but are not yet developed and entirely present on the market.
Vehicles already present on the market are extremely expensive and not everyone can afford them.
6. Electric Vehicles
Having vehicle motors with fewer maintenance costs is definitely one of the wanted trucking industry trends. More importantly, consumers lean on it due to a long life as a huge advantage.
In addition, the cost of electricity is more affordable if compared to the cost of petroleum fuels. Therefore, the rise of electric vehicles is a huge benefit to drivers.
In the upcoming years, the vehicles will have implemented batteries with a storage capacity for extended runs. Moreover, these will not result in negativity on the hauling capacity which is really important.
The electric trucks are expanding at a faster pace on the market and the consumers are expecting it to happen that soon.
However, there are yet disagreements between consumers on electric vehicles being cheaper than diesel and gasoline.
By the same token, they agree that it brings lower costs in maintenance and a longer life which are positive things for the users.
Continually, it is fact that running a car on electricity is less dangerous than on petroleum when driving a long distance.
Nonetheless, developing batteries with enough storage capacity is still a challenge for the manufacturers. They need to think about the recharging between runs and light batteries that will not impact the hauling capacity of the truck.
This leads to linking the electric propulsion with an autonomous vehicle.
What is more important, it is Environmental Protection Agency (EPA) friendly, Consequently, this leads to support for the manufacturing companies by the Better Business Bureau (BBB), Bureau of Labor Statistics (BLS) etc.
7. Fuel Costs
Fuel has always been the second biggest expense in the trucking industry. Regardless of the price, the industry and transportation companies are facing the fuel costs are one of their biggest challenges.
The main reason for this is that most of the engines are made to run on diesel and diesel prices evolve and unfortunately increase.
This year is not an exception. The diesel price will continue to rise.
According to the latest source, the rise is provoked by the political conflict which leads to interruptions among consumers and carriers.
Even though considered as one of the trucking industry trends, diesel evolving price affects the transportation industry big.
8. The Tax as a Huge Shot for Business and Trucking
The tax is known as a big shot in the future. In particular, the most affected will be the businesses in the trucking industry.
There is an indication that motor carriers are already rising their drivers pay from 5% to 10%, or even more.
Furthermore, there are cases where carriers increased the pay even before the tax rise as one of the trucking industry trends.
In addition, the pay increase is mostly due to the driver shortage which is a problem for the transportation companies.
It is known that the number of drivers available is evolving each year. What is more crucial is that on top of rising pays, carriers face other expenses as well.
To put it in another way, that is the following:
- Replacement of aged trucks of aging trucks
- New effective tax rates
- Renewing fleets
While there are companies that benefit from foreign profit directly, the customers are willing to invest even more in their transport services.
This is why they need to hire more staff. It is important for the company’s reputation and revenue to keep the capital rising.
Moreover, they count the customers needs as an initiative to increase the freight hauling demand, not only for the users but to expand the company’s capacity as well.
9. Industry Consolidation is Poised to Accelerate
Along with the expansion of the freight transportation industry the acceleration of sectors remains fragmented and mostly trucking.
For instance, as a partial consolidation is found the LTL sector which covers the truck brokerage, logistics, truckload etc. This also includes the contract logistics segments which also all remain highly fragmented.
According to the latest trucking industry trends, the upcoming year is expected to find industry consolidation sectors.
Notably, they will offer a wide range of services helpful for the consumers.
In addition, the debt costs are low and at a reasonable standard. On the other hand, the organic growth is a challenge among the qualified blue-collar sector.
Furthermore, the consumers are always getting comfortable with new, larger and diversified logistic solution providers.
It is also true that the highway system changes with the economic development each year. As an illustration, I would say that the system actually depends on the economic rise.
The manufacturers are seeking funding mechanism in order to enable the civil engineering project. As consumers are satisfied with the invention, the industry is finding their way to properly maintain and expand this.
In fact, this is also to avoid a poorly maintained system.
It is clear that the transportation network in the USA is the primary backbone in logistics. At the same time, it supports the economy the incremental growth.
10. Re-urbanization Trend Causes Bigger Mileage
There have been years followed by the re-urbanization trend. There are young college grads which prefer to work and move in the urban cores.
Consequently, this is due mostly to be able to work what they love and follow the latest trends. Unseemingly, this is highly related to the trucking industry trends.
The suburbanization is causing a strain on the highway systems. In addition, this causes a bigger mileage for the transportation companies and their drivers.
The migration trend is more and more present in the urban areas which lead to disproportionately located in the central district.
Furthermore, this leads to a fewer left population in the areas from where people leave. This consequently increases the distance between stops for drivers.
Continually, it reduces the number of parcels per stop, and even worsens the traffic congestion.
Even though not well-thought yet, the re-urbanization is decreasing the transportation demand. All of the above-mentioned is related and a mix of trends considered part of the trucking industry trends.
With the increase of expenses of transportation companies on fuel, auto parts and the rest, the transportation companies should apply new methods and strategies to improve their efficiency and mobility.
For the same purpose, they should look ahead and be ready to invest in equipping their fleet with smart devices and deploying modern technologies that facilitate deliveries.
- Join us tomorrow for a Progressive Hiring Event – Tuesday, October 15th, 2019October 14, 2019 - 2:00 pm
- 10 Trucking Industry Trends For 2019September 23, 2019 - 11:23 am
The e-commerce market is expanding its trucking industry trends. Correspondingly, it continues to expand to the number of $3.2 trillion by the year 2020. These trucking industry trends are considered as a great idea for other industries as well, not only the transportation. However, it seems to represent a major problem for the freight market. […]