The last two years have been quite eventful for the trucking industry. Advancements in technology and increased demands for freight services have contributed to more growth in the industry, while stricter regulations and a declining driver population have brought their own challenges. The American Trucking Association (ATA) recently released their projections for what the next year might have in store for the trucking industry. Let’s take a look at some of the potential trucking trends for 2019.
Continued Growth
ATA’s chief economist, Bob Costello, predicts that the trucking industry should continue to see strong growth throughout 2019 and into 2020 as well. Much of 2018’s growth was the result of increased freight volume, which jumped by about 5.4% over last year’s figures. Since over 70 percent of the United States’ freight volume is transported by the trucking industry, a small increase in the country’s overall freight intake can have a big impact on trucking revenues.
However, this positive shipping climate may meet some challenges in mid-2019, depending on whether or not the North American Free Trade Agreement (NAFTA) negotiations with Canada and Mexico are able to be resolved by June. The direction in which these negotiations go will have a huge impact on the trucking industry, as the majority of goods traveling across both the Mexican and Canadian borders do so via trucks. Approximately $6.6 billion in trucking industry revenue and 31,000 annual truck driver jobs are supported by NAFTA trade each year, so a positive outcome is essential to maintain continued growth in the industry.
Capacity Capabilities Remain Tight
While freight volume remains elevated, capacity for moving that volume continues to struggle. The driver shortage is still very prevalent, and trucking companies are beginning to really see the effects. In 2017, the industry reportedly lacked upwards of 50,000 drivers, and at the current trajectory that figure will easily grow to 175,000 drivers by the year 2026. Transportation companies, regulatory agencies and lawmakers need to make it a priority in 2019 to start taking action to combat the shortage before it gets worse.
As a result of the driver shortage, the industry is seeing a decline in the amount of trucks in operation, as well – further contributing to the capacity crunch. Large fleets (those that bring in more than $30 million in annual revenue) have 1.5% fewer tractors in operation this year over last year, and smaller fleets saw a drop of 0.6% this year after falling 0.2% the previous year.
Rising Rates
Capacity challenges, fuel prices, increased taxes and other factors may lead transportation companies to have to hike up their freight transportation rates. While this trend may help transportation companies remain profitable in the short term, it could drive shippers to consider other processes for moving freight in the future.
Data Collection and Other Technology
With the implementation of Electronic Logging Devices (ELDs), regulatory agencies and trucking companies are expected to be collecting more accurate data that will give a better picture of how operations can be made more efficient. For example, ELD data will be able to show which routes make better time and which routes consistently cause drivers to lose time so that drivers and trucking companies can plan routes more efficiently.
In addition to ELDs other types of technology are taking center stage in the industry. More implementation of cameras, artificial intelligence and other advances in technology is expected to be seen more in 2019 and beyond.
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