The November 2017 Trucking Issue: Dominate mode, ever-present challenges

We tend to take it for granted, and it’s not until you stop and really digest some of the numbers that you realize just how dominant trucking is as a mode of freight transportation in the United States.

Just a quick glance through the American Trucking Associations’ (ATA) recently released “American Trucking Trends 2017” report offers a few jaw-dropping facts. For example, trucking revenues over 2016 rang in at $676.2 billion. And while that’s a drop off of about $50 billion from 2015, it still equates to nearly 80% of total U.S. freight spend over the course of last year.

In 2016, there were 33.8 million trucks registered for business purposes, including 3.68 million Class 8 trucks. Those vehicles moved 10.42 billion tons of freight, or 71% of all domestic freight tonnage, with the help of the more than 7 million Americans employed in trucking-related jobs—including 3.5 million drivers. But that’s just scratching the surface of what the ATA has collected in its annual compendium.

And at the same time, while the outlook is generally positive for growing volumes through 2023, there remain a number of challenges that continue to shroud trucking that will put more pressure on carrier operations and end up costing shippers in the long run.

Contributing editor John Schulz offers our Annual Motor Carrier Regulations update, a feature designed to help shippers make some sense out of the constantly shifting regulatory landscape inside and outside the Beltway.

“To the delight of trucking executives, the regulatory onslaught they were feeling during the Obama Administration has eased,” says Schulz. “While ELDs are due to take effect next month, full enforcement of violators won’t start until the second quarter of 2018. In the meantime, diesel emissions limits are being reviewed, and HOS is no longer being tinkered with.”

However, the same can’t be said at the state level. In fact, carrier executives tell Schulz that states are becoming more aggressive than ever in targeting truckers.

“Many states are strapped for cash,” says Schulz, “and carriers say they’re being treated like a ‘rolling piggybank’ for fines such as enforced overtime, air quality emissions, as well as routine safety violations and speeding—with most rules differing state by state. They have a bullseye on their back, and its just going to pump up rates.”

And when you roll up the continued federal regulatory actions and the mounting state fines and aggressive enforcement in aggregate, shippers are going to find tighter capacity in both in truckload (TL) and less-than-truckload (LTL).

“Nobody in TL can find enough drivers and that, coupled with the ELD enforcement, will lead to an even tighter driver environment,” says Schulz. “The booming economy cuts both ways for truckers. On one hand it’s great because there’s extra freight, but it also tightens the job market as drivers can be lured to home construction and local driving jobs that keep them home at night.”

As group news editor Jeff Berman writes this month, one way that shippers will be combatting the increasing capacity shortage will be by turning to the number of digital freight matching providers that keep popping up.

“While all signs are pointing to higher rates and capacity tightness, new options for securing loads for shippers are expanding,” says Berman. “Some call it ‘Uber for freight,’ while others call it ‘on-demand trucking.’ Call it want you want, but the race to develop apps that match an available truck with a pending load is heating up—and the players are well-funded and looking to stand out in a market where margins are already razor-thin.”