Truck Driver and Industry Challenges 2023

07-16-2023 | Clarence Green | 0 Comments

America keeps moving because truckers do. A truck driving career can be rewarding and frustrating at the same time. Over the last three to four years, the trucking world has changed and then changed again. Truck drivers must deal with congestion, long hours, parking problems, lack of sleep, tight deadlines, and inclement weather daily. However, these aren't the only trials they may face in a day, week, month, or year. Truck drivers and their employers continue to experience supply chain disruptions and low freight volumes. Shippers have inventory, but they can't sell it. Consumer spending habits have changed, and people are spending less due to inflation. The country is in the middle of a slowdown. It is reflected in the trucking industry and spreads with a trickle-down effect.

On-going Recession

The trucking industry is experiencing reduced shipping capacity and what is being called a "freight recession." Reduced shipping capacity means there's less job security for truckers, and if the recession continues, there will be even fewer jobs. Owner-operators are going bankrupt and are being squeezed out of the industry because of operational costs. Garrett Holland and Joseph Higgins, research analysts from Baird, believe the "freight recession" is only 40 percent complete https://talkbusiness.net/2023/06/analysts-freight-recession-about-40-complete/. So, there's potentially more to come for the last half of 2023.

Freight Volume Shortages and Rising Costs

The U.S. is facing the latent effects of the COVID-19 pandemic. Retailers experience experienced an unbalanced situation of supply and demand. Today, many businesses are still struggling to restock their shelves and warehouse. Trucking carriers have been trying to keep pace, but rising costs and continual driver shortages have made the job difficult. In addition, the supply bottlenecks and congestion at U.S. ports have also contributed to shipping nightmares. As a result, shipping fees have risen, and customers bear the brunt of the costs https://www.smart-trucking.com/freight-shortage-2023/#:~:text=The%202023%20freight%20industry%20faces,job%20stability%20and%20consumer%20prices.

Integrating Technology

Trucking employers and the U.S. government are looking to technology as one of the solutions to address the truck driver shortages and improve proven productivity, efficiency, and safety. Autonomous semi-trucks are being built and researched. A recent study from the University of Michigan states that automated trucks could replace "about 90 percent of human driving in U.S. long-haul trucking, the equivalent of roughly 500,000 jobs" https://www.govtech.com/fs/autonomous-trucks-may-take-large-majority-of-long-haul-jobs. California is the first state in the U.S. and first place in the world to ban the sale of diesel trucks by 2036. The state has recently reached an agreement with truck manufacturers to build electric semi-trucks https://calmatters.org/environment/2023/04/california-ban-diesel-trucks/.,

https://www.usatoday.com/story/news/nation/2023/05/01/what-to-know-about-californias-ban-on-new-diesel-trucks-by-2036/70173221007/. Paper logbooks are disappearing, and employers have gradually implemented electronic login devices (ELDs) over the last few years. The U.S. is now requiring the use of ELDs. The Canadian ELDs mandate began earlier this year. Employers now use global satellite positioning (GPS) in all their big rigs. GPS lets carriers know precisely where their trucks and freight are in real-time. It also allows them to send help quicker in case of a flat tire or equipment malfunction.

Driver and Parking Shortages

There aren't enough truck drivers, and some drivers may get laid off at the end of the year if freight volumes don't pick up. The American Trucking Association (ATRI) says that by 2030 the industry could be short 160,000 drivers. In 2021, the country was short 80,000 truck drivers https://trucking.org/news-insights/ata-chief-economist-pegs-driver-shortage-historic-high. The number of interstate truck fleets dropped by 9,000 companies in early 2023 https://www.freightwaves.com/news/trucking-bloodbath-snares-fleets-large-and-small. Retaining truckers is getting more difficult for companies. The job demands are causing individuals to leave for other work or retire from the industry. The average age of the trucker is 46 to 47 years old. Carriers are aiming to recruit younger people to help fill in gaps. Some states are examining reducing the commercial driver's license age from 21 to 18.

In addition to the driver shortage, the truck parking shortage makes the job difficult too. An estimated 13 million trucks are on the road daily, and 2.9 million are tractors and trailers https://www.truckinfo.net/research/trucking-statistics. Trucking industry experts say that means only one truck space per 11 trucks and a shortfall of 44,000 parking spots  https://fightingfortruckers.com/truck-parking-2/. Many truck-size parking spots start filling up between 4 p.m. and 5 p.m., especially at rest stops and other free locations. Congress is considering a bill to provide $755 million in grants for truck parking construction and improvements.

Consumer Spending and E-Commerce

During the pandemic lockdowns, the demand for goods and commodities rose sharply because more retailers and consumers purchased products online. This growth in consumer spending and upsurge for large e-commerce companies like Amazon and Walmart strained the country's supply chain. Truck drivers and their employers were part of a significant push to get products from warehouses and distribution centers to homes in unbelievably short timelines. Now consumers have shifted from e-commerce almost exclusively to a combination of brick-and-mortar shopping and e-commerce shopping. Consumers are also cutting back on their spending due to high inflation  https://bestpass.com/resources/blog/trucking-industry-outlook#:~:text=Rising%20fuel%20costs%2C%20increasing%20insurance,to%20affect%20the%20trucking%20industry. They also prefer to make more essential purchases, and spend less money in other places. Fewer people have large amounts of disposable income.

Increased Fuel and Insurance Costs

 At the end of 2022, Diesel fuel was over $5 a gallon for most of the year. During the first portion of 2023, diesel was below $4 a gallon https://talkbusiness.net/2023/06/analysts-freight-recession-about-40-complete/. The price of oil is supposed to hit $92.36 a barrel  https://bestpass.com/resources/blog/trucking-industry-outlook#:~:text=Rising%20fuel%20costs%2C%20increasing%20insurance,to%20affect%20the%20trucking%20industry. It is hoped gas prices will get better by the end of the year. Events in Europe and the Middle East affect how prices go up or down.

The ATRI says insurance premiums continue to rise for truck drivers because of the higher payouts from lawsuits involving transportation vehicles. Their report states premiums rose 47 percent from 2009 to 2018 https://bestpass.com/resources/blog/trucking-industry-outlook#:~:text=Rising%20fuel%20costs%2C%20increasing%20insurance,to%20affect%20the%20trucking%20industry. These prices increase significantly contribute to the uneasiness of operating a trucking business in 2023.

Teamster Union Strike

The UPS Teamster Union Strike is pending for July 31 or Aug. 1. It will affect more than 340,000 full and part-time workers. In recent weeks, UPS employees all over the U.S. have been practicing for their picket lines and carrying signs. The UPS Workers seek a better pay scale, more full-time job options, air conditioning in all vehicles, and improved protections against managerial harassment. If the strike goes forward, the shippers, carriers, truck drivers, and consumers can expect major supply chain interruptions. The last UPS Teamers strike was in 1997, lasted 15 days, and caused panic and stress throughout the country https://abcnews.go.com/Business/potential-ups-teamsters-strike/story?id=100793059.

Truckers are a dedicated and tough group, yet they are human like everybody else. Many Americans need to be made aware of what it takes to be successful in this line of work and the sacrifices semi-drivers make to keep the country moving. The recession will keep hurting the trucking industry, freighters, and customers. Fuel, insurance, and other high operational costs make making a profit challenging but not entirely impossible. The new technology being integrated into the lives of truck drivers is supposed to make their lives easier. For some drivers, there is a question about that. Computers and robots could take over some trucking jobs. It is believed that it is only a matter of time. 2023 has continued to be a year of freight volume, driver, and parking shortages. These three items will contribute to delays and disruptions everywhere. Today is also a time to study the shift of consumer spending trends from an exclusively online shopping model to an in-store and some online shopping. The future is coming, and California wants to lead the way by protecting the environment with more electrified delivery vehicles. It needs to be clarified what the ban entails for interstate commerce. The UPS Teamster Strike will be challenging in the coming days and weeks. Once again, the U.S. could get a lesson on the actual value of all truck drivers. A truck driver's heal matters as much as an office worker's job opportunities, pay, health, and safety matter. Truck driving is a crucial career to make the country's wheels go around. The days, weeks, and months ahead will call for patience for everyone. The remainder of summer could be complicated. It may also be a long fall and winter as the holidays approach. Time and the stock market will tell us where many things will go.

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