Businesses of all shapes and sizes have an obligation to provide their products and services to customers across different locations. And a better way to achieve that is by depending on the trucking companies for a safe, easy, and fast delivery.
Through the years, the trucking industry has played a vital role in the growth of the economy, that is why it would not hurt if the industry asked for a minor price increase from the shippers.
DAT Solutions LLC, an American freight exchange service that offers transportation information, has recently presented a report showing that carriers have been charging shippers for an average of 22% in order to move their freights from one place to another.
The increase in shipping is definitely going to have a bold impact not just to the drivers but to their respective companies as well. Every year, the trucking industry gathers more than $650 billion dollars, which is 5% of the GDP of the USA. These numbers only show that the demand for trucking companies are not declining, and is continuously growing instead.
The following are two well-known trucking companies whose shares have catapulted at record highs:
- Werner Enterprises Inc. – Werner Enterprises was established in 1956 and is located in Omaha, Nebraska. The company is headed by Derek J. Leathers, the President, and CEO. Werner is a freight carrier, transportation, and logistics firm that offers supply chain solutions and freight management. The Nebraska-based freight company has a projected revenue of $2.1B.
- Old Dominion Freight Line Inc. – Old Dominion Freight Line Inc. is a North Carolina-based company that works as a less-than-truckload motor carrier. The company runs an air and ground expedited transportation, container delivery, and truckload brokerage. David S. Congdon is the CEO of the company. It has an estimated revenue of $3.2B.
Lacking Truck Capacity and Truck Drivers
One of the reasons why the trucking industry is receiving a high demand for their service is the sudden flow of new businesses that require carriers to deliver their cargos. However, reality does not only revolve around the advantages that companies experience. In spite of the positive outcomes, the trucking companies are still having difficulties when it comes to adding truck capacities. Yes, the industry has extra revenues because they increase the delivery price, but instead of using it to add capacity, they utilize the money to pay for the drivers.
Another problem that the industry is facing right now is the shortage of truck drivers. The carriers might have available big trucks that could carry many loads but the lack of drivers is deeply hurting them.
ACT Research is the number one publisher of commercial vehicle industry data, strategic forecasting, and market analysis services. The publisher says carriers have been investing in new equipment. An estimated 37,500 huge trucks have been ordered in December 2017 to cater to the influx of demand.
However, Ravi Shanker, an Analyst with Morgan Stanley, asks an important question: “Can you find trucks? Can you find drivers? That is the biggest factor. You’re probably going to get a lot of freight but at the same time hiring drivers is going to be really hard.”
The demographics and lifestyle of truck drivers are two of the major reasons why there is a shortage in the position. The industry is always looking for male drivers who are 45 years old and above. This lowers the chances of aspiring truck drivers who are below the required age bracket to get jobs.
Their lifestyle is also a downfall. Delivering cargos non-stop limits the options of the drivers when it comes to their hygiene, nutrition, and sleep.
Meanwhile, the mandate of the federal Electronic Logging Device or ELD is the latest dilemma that truck drivers are facing. It literally affects their work, causing some to quit their jobs. Truck drivers are very much concerned that their privacy is being compromised.
In order to solve the issues surrounding the truck drivers, authorities should somehow create a law that allows carriers to raise the driver’s salary, lower the required age bracket, lessen the driver’s time on the road, and somehow use autonomous trucking, which Elon Musk is working on right now.
The business magnate has recently introduced the Tesla Semi Trucks that are both heavy-duty and all electric. The futuristic trucks could potentially benefit the drivers, making their job as easy as possible.
Trucking companies may be facing some minor issues but with the proper solution from the authorities, things will surely turn out to be just fine. The continuous growth seen from the industry is definitely creating a bold impact on the economy, especially in the United States.