The trucking industry has been grappling with a range of difficulties in recent years, and many of these challenges are expected to persist into 2023. From escalating operational costs to driver shortages and evolving regulations, trucking companies face numerous obstacles that can hinder their effectiveness and profitability. In this blog post, we will explore the top trucking industry issues identified toward the end of last year, along with additional challenges that are likely to impact the industry in 2023.
American Trucking Research Institute issued a report into the different problems faced by truckers in 2022. Their Top Industry Issues showed the top 10 issues faced by truckers. You can find the report at the following link: https://truckingresearch.org/wp-content/uploads/2022/10/ATRI-Top-Industry-Issues-2022.pdf. Here is an overview, and we will dive into each of them:
1. Operational Costs: Rising operating costs, including fuel prices and insurance premiums, coupled with declining shipping rates and increased competition, pose significant financial challenges for trucking companies. Higher expenses can erode profit margins, while decreased rates make it difficult to generate sufficient revenue to cover costs. Intense competition from other firms further compounds the struggle to secure business and maintain profitability.
2. Driver Shortage: The American Trucking Associations reports a shortage of over 80,000 truck drivers. Multiple factors contribute to this scarcity, including the demanding lifestyle associated with the profession, an aging workforce, and regulatory pressures that push drivers to leave the industry. Addressing the driver shortage is crucial for ensuring the smooth functioning of the trucking sector.
3. Truck Parking & Infrastructure: Although it might seem like a minor concern to the general public, the lack of adequate truck parking has been a persistent issue in the industry since 2015. Insufficient parking spaces not only lead to violations of federal hours of service rules but also increase the risk of illegal parking. Recognizing the severity of this problem, the U.S. Department of Transportation has recently allocated $40 million in grants to Florida and Tennessee to address the shortage of truck parking.
Other Infrastructure Issues: Inadequate infrastructure, such as deteriorating roads, congested highways, and limited truck parking spaces, presents significant challenges for trucking companies. Poor infrastructure not only increases maintenance costs but also affects delivery timelines and driver productivity. Collaborative efforts between the industry and government are necessary to invest in infrastructure improvements and create a conducive environment for efficient transportation.
4. Driver compensation has been one of the most pressing concerns for the transportation industry in recent years. As the fourth highest industry concern for this year, it is clear that this issue is not going away anytime soon. Although some progress has been made in addressing this issue since it first appeared on the Top 10 list in 2019 as the third ranked issue, there is still much work to be done. In order to attract and retain talented drivers, companies must offer competitive compensation packages that include fair pay, benefits, and opportunities for advancement.
5. The State of the Economy: The trucking industry, like many others, has experienced disruptions in the supply chain due to the pandemic. In 2023, the industry will continue to grapple with challenges such as record-high diesel prices, equipment and parts shortages, and wage pressures caused by inflation. Concerns about a potential global recession will also impact the trucking sector.
6. Scheduling Delays: Detention fees have long been a concern for drivers. The time spent waiting at customer facilities reduces drivers' pay and makes it difficult to attract and retain qualified professionals. Recent years have seen an increase in detention times, likely due to reduced staffing at shipper and receiver facilities.
7. Driver Retention: Apart from the shortage of drivers, driver retention has emerged as another critical issue. Unattractive pay and benefits, long shifts, and extensive travel distances contribute to high turnover rates. Trucking companies will face difficulties in recruiting and retaining drivers unless these factors are effectively addressed.
8. Compliance, Safety, Accountability (CSA): Trucking companies may have to navigate new or changing regulations, such as those related to emissions, hours of service, and other safety standards. These regulations can be complex and may require companies to make changes to their operations or equipment in order to comply. Failing to comply with regulations can result in fines or other penalties, so it is important for companies to be aware of and adhere to these regulations.
9. Speed Limiters: This is a new addition to the problems. Earlier last year, the Federal Motor Carrier Safety Administration (FMCSA) released its Notice of Intent to commence with a speed limiter rulemaking in 2023.
10. Lawsuit Abuse Reform: For the third year in a row, Lawsuit Abuse Reform, previously termed “Tort Reform,” is a Top 10 issue. ATRI research has quantified the negative impact of excessive litigation on the industry’s insurance costs, and this year motor carrier respondents ranked Lawsuit Abuse Reform and Insurance Cost / Availability as their sixth and seventh top concerns, respectively (Table 2). Continued state-level advocacy is resulting in legislative wins for the trucking industry. Tort law permits frivolous or otherwise undesirable litigation to crowd the court system, or the fear of litigation can curtail innovation, raise the cost of consumer goods or insurance premiums for suppliers of services, and increase legal costs for businesses.
Emerging Issues:
As part of its analysis of critical industry issues, ATRI also tracks the emerging topics that generate significant industry interest but fall just outside of the Top 10 concerns (Table 1). This analysis can provide insight on issues that may emerge in the future as a top industry issue such as Insurance cost and its availability, Hours-of-Service (HOS) Rules, and Driver Training Standards.
In addition to these, we also add some more critical issues faced by trucking companies and truck drivers.
14. Equipment Maintenance: Maintenance challenges, such as repairs and parts replacement, are an ongoing concern for trucking companies. However, a lack of technicians and difficulties in obtaining necessary parts have further complicated the maintenance process. Additionally, production delays and supply chain disruptions resulting from the pandemic and economic challenges have made it harder to source new equipment.
15. Safety/Risk Avoidance for Drivers: Truck drivers often face long working hours and spend significant time away from home, which can lead to increased physical and mental health issues. Moreover, the nature of their work puts them at risk on the road. While efforts have been made to improve safety for drivers, such as the implementation of new Hours of Service (HOS) rules, there is still a need for ongoing measures to mitigate risks.
16. Competition and Market Dynamics: Intense competition within the trucking industry demands companies differentiate themselves and provide exceptional customer service. With advancements in technology and changing customer expectations, trucking companies must invest in branding, customer relationship management, and value-added services to maintain a competitive edge in the market.
This leads to another aspect of competition - branding: In an era of increased competition and economic pressures, trucking companies must establish strong branding to differentiate themselves from their rivals and improve their sales via branding. Without consistent and strategic branding efforts, these companies risk losing customer loyalty. By crafting a compelling brand story, trucking companies can effectively position themselves in the market.
17. Double-brokerage: Reports indicate that double brokerage has increased twice in recent times. Several red flags can alert companies to scams, and brokers said they’re scrutinizing everything from ELD records to IP addresses. But still, there are cases when the carrier delivered and did not receive money from scams.
18. Driver Health and Well-being: A professional truck driver earns an average of $81,476 per year, far more than the national average of $51,480. However, many of them state that the salary does not compensate for the long working hours, the nights away from home, the risks they take when going out on the road, or the impact on their mental and physical health. The FMCSA has made some efforts to restrict the number of hours that truck drivers can spend behind the wheel and to require mandatory rest during the drive if there has not been a minimum of 8 hours since the driver’s last haul.
19. Obsolete Technology: Using obsolete technology is still a significant challenge that threatens the success of the trucking industry. Outdated technology can lead to inefficiencies, as it can slow down operations and reduce the effectiveness of driver records and documentation. Systems using obsolete technology lack the data security necessary to protect customer and driver information. This could lead to issues with customer trust and a lack of confidence in the trucking company’s safety.
20. Environmental Impact: The trucking industry is increasingly scrutinized for its environmental impact, with emissions from truck engines being a major concern. One of the major environmental concerns surrounding the trucking industry is the amount of air pollution that is created. Trucks that are powered by diesel engines produce large amounts of gas emissions. Additionally, due to the constant and frequent idling of vehicles in trucking yards and at stops, trucks also produce large amounts of black carbon, a type of particulate matter that is hazardous to public health and can also decrease vehicle efficiency. To become more environmentally friendly, trucking companies must invest in modern, fuel-efficient, and electric vehicles.
The trucking industry in the USA faces a myriad of challenges in 2023. From operational costs and driver shortages to changing regulations and infrastructure limitations, trucking companies must navigate these obstacles to remain successful and sustainable. By embracing technology, prioritizing driver safety and well-being, and adapting to evolving market dynamics, the industry can overcome these challenges and continue to play a pivotal role in the nation's economic growth.