State of the Trucking Industry – April 2022
With the COVID-19 pandemic coming to its epilogue, we are starting to see the aftereffects exacerbating a variety of existing issues within the trucking industry. After two years of supply chain and transportation shortages, drivers have also widened concerns that they need more than the current low pay and less than desirable working conditions.
Combined with this, consumer prices have been soaring post-pandemic. According to the Consumer Price Index, all items have increased by 7.9% in the last 12 months (as of February 2022). Although this doesn’t come as a shock to most people who have already been experiencing this inflation, it is important to note when speaking about the trucking industry – the prime support and delivery method of the supply chain.
To put it plain and simple, with supply chain issues, consumer price inflation, driver shortages, and more – the state of the trucking industry is not looking good… but this doesn’t mean action can be taken to prevent further decline.
A growing driver shortage
One of the prime factors is the overall driver shortage, which continues to rise. According to the American Trucking Association (ATA), there is no singular specific reason that these shortages are occurring – but rather a combination of many reasons. Of the many, the most important ones that need to be gone over are a high average driver age, low wages, and the pandemic.
The average age of drivers nearing retirement means a large portion will be dropping out of the industry soon. Although this creates new job openings – usually considered a boon – the lack of skilled laborers to fill these roles is a growing concern. Attracting a new crop of drivers can be hard to do, especially with the long hours and oftentimes low pay the transportation industry is notorious for. The obvious solution to this dilemma would be hiring younger drivers and offering more pay and benefits. Fortunately, the latter is already coming to fruition, as the ATA notes “data from the Department of Labor shows that average annual earnings of production and non-supervisory employees, with the vast majority of those being driver occupations, in the long-haul for-hire truckload industry is increasing roughly five times the historical average”.
As we move towards the end of the pandemic, the number of drivers who have left their job for more remote or better-giving opportunities has become apparent.
Price increases, supply chain problems, and more
Although COVID-19 is well along its path of severity for the masses, the shift of opinion regarding remote job opportunities has grown to favor NOT meeting as many individuals face-to-face. Safety is important in every job, but in the trucking industry especially due to the high in-person contact that comes with delivery. Unfortunately, it seems as if the market is less worried about safety and more focused on the drastic consumer price increases of the past couple of years.
According to the U.S. Bureau of Labor Statistics, gasoline has increased by 38% in the past 12 months. As one of the most important items in the trucking industry, this drives the inflation of other consumer items, as well. If diesel prices are through the roof, this causes difficulties in production and shipping which in turn increases the prices of the items that are being transported. This is a compounding problem, as the pandemic has caused a huge demand for goods over a dwindling supply.
Hopefully, these supplies can be regained soon, as increased shipping costs, limited driver availability, and an overall need for economic recovery is plaguing this over the road industry.
The Trucking Action Plan
With all these problems looking very grim for the industry, the publicity has drawn attention at the federal level prompting the government to release an action plan aimed at reducing the effects of the pandemic on the transportation industry and turn the problems around for the better.
The Department of Transportation and Labor has plans to expand Registered Apprenticeship programs and replenish the number of well-trained drivers on the road. With tens of thousands of drivers needed across the industry, these plans can only be a starting point to reinvigorate commercial transport in the US. Along with the recruitment of new drivers, veteran departments are working to reach the approximate 70,000 veterans who have had trucking experience in the last 5 years.
Reducing barriers to obtain a commercial driving license (CDL) combined with recruitment of new drivers should prove helpful. All in all, with this federal push for reloading the driver workforce, we could see fewer problems in the supply chain overall in the next few years. Reduced challenges in the trucking industry equals reduced challenges in consumer pricing… and that’s what we all want to see, right?
Keeping our heads held high in the trucking industry
Overall, we at Senzit believe that despite the industry of over-the-road trucking may be looking down, there is a bright future ahead of us. If you are facing problems other than these economic downfalls, such as managing or overviewing your trucking fleets – maybe we can help you in a much faster and easier way.
Check out our website for a predictive maintenance solution that tracks your vehicles both on and off the road, saving you money on unplanned downtime.
