We’ve all been on the highway and a big rig truck comes up on you and seemingly runs you off the road. More than likely it was your fault as truckers are some of the best drivers in the world. But their trucks are big and intimidating. Trucks are an incredibly important part of our economy as they ship 70% of everything. Nothing else even comes close. So today let’s look at what’s going on in the industry.
It looks like business is good. The closest competitor to trucks is rail, and it hardly compares in market share. Business is good too, as total tonnage shipped by trucking continues to climb. But all is not well in the land of trucks. They’re facing changing tides on many fronts that bring new challenges to the industry.
- Fuel costs: When the cost of diesel goes up we don’t notice it as much as the cost of gas. But consumers do feel some of the pinch. The challenge in trucking is to pass along rising fuel costs without disrupting demand for the items being shipped.
- Regulation: Whether on environmental or safety grounds, the government is more involved with trucking than they’ve ever been. New regulations are already shaping passenger vehicles. Commercial trucking has been largely protected but not for much longer. The American Trucking Associations (ATA) is an organization representing trucking and they’re already in Washington trying to influence policy. Yes, everyone has an advocate or a lobbyist.
- Trucker shortage: The ATA estimates that by 2022 there will be a shortage of ~240k truckers. The challenges above coupled with an aging trucker population has led to fewer new truckers entering the market. This will drive wages up, if it hasn’t already.
As it turns out, people from my generation aren’t so interested in becoming truckers. I for one can’t blame them. We hear about getting STEM jobs, and we want to work from home. Trucking just isn’t sexy. Will the increase in wages draw enough people to trucking? Economics would say so. A supply and demand gap can be closed with a change in prices. But will that price increase be too much to pass on to consumers? That’s the pickle. We’ll see if trucking is still so significant in a few decades.
Image: Don O’Brien