Despite what the lyrics of the song “Convoy” may have you believe, trucking is not a struggle between law enforcement and long lines of big rigs. As an industry, trucking is highly focused on safety rates and efficiency, continually trying to innovate to improve delivery times and lower accident rates. For a country as large as the U.S., shipping goods efficiently and safety is crucial to the economy. Over the course of the last decades, the industry has seen remarkable growth. With this expansion, however, comes increased regulation. The trucking industry is predicting solid growth in the coming years, but it faces hurdles caused by increased regulation and an ongoing shortage of truckers.
The trucking industry is bracing for a new electronic logging device (ELD) mandate which is currently set to take effect on Dec. 18, 2017. After that date, all trucks will be required to ensure driver compliance with hours-of-operation regulations. On Monday, the House Appropriations Committee inserted language into the Department of Transportation fiscal 2018 funding bill to delay the mandate.
The electronic logging device mandate exposes tensions within the trucking industry. The delay measure was praised by the Owner-Operator Independent Drivers Association, but criticized by the American Trucking Association.
“Clearly, members of Congress have heard concerns about the mandate from their constituents. The agency has failed to answer important questions from Congress and industry stakeholders about this mandate,” said Todd Spencer, OOIDA’s executive vice president.
Meanwhile, the ATA called attempts to block the mandate “misguided” and a “nakedly transparent” attempt to block a rule that would improve public safety.
The implementation of the electronic logging devices continues a long-running trend towards increased regulation of how drivers manage their time. It’s another piece of legislation cutting into the sense of flexibility and independence that drew people to the profession in previous years.
A shortage of trained commercial drivers has been a headache for the industry for years. The trouble is, the shortage is getting worse over time. If the industry needed an additional 20,000 drivers in 2005, by 2014, the shortage was up to 38,000 drivers. According to industry statistics, the median age for truckers is 46.5, compared to 42.4 for the average American worker. As these drivers reach retirement age, the industry expects that it will need hundreds of thousands of additional trained drivers to replace them.
This makes it even more concerning that young people are not moving into the trucking industry as a career. The number of 25-to-34-year-olds in the trucking industry has dropped by 50 percent, according to an ATA study. High turnover means that companies are struggling to make sure that trucks keep moving.
“Over the next decade, the trucking industry will need to hire a total 890,000 new drivers, or an average of 89,000 per year,” the ATA writes. “Replacing retiring truck drivers will be by far the largest factor, accounting for nearly half of new driver hires (45%).”
Unfortunately, these trends are threatening a constriction in the pool of available drivers just as the trucking industry foresees continuing growth over the course of the next six years.
As the economy recovers, the trucking industry is making important gains. According to the American Trucking Association, in June, U.S. truck tonnage increased by 1.3 percent over June 2016, the result of choppy gains throughout the year. The industry is confident that demand for freight services will continue to be strong as both the economy and the country grow. In its annual forecast, the ATA predicted that freight volumes would increase by 2.8 percent in 2017 and projected 3.4 percent annual growth through 2023.
“We are starting to see some selected tightness in freight handling capacity, enough to suggest that capacity expansion will be required if the modes are going to be able to handle anticipated growth,” the report stated.
Over the course of the last decade, the trucking industry has benefited from low fuel prices. Despite encouragement from the railroad industry, domestic shippers are reluctant to adopt intermodal shipping, which combines the use of trucks and other forms of transportation, generally rail.
Transportation is a complex business. As the trucking industry grapples with increased shipping demand, a driver shortage, and increased regulations, the costs of shipping may rise. Even in the next year, the ELD mandate may have an impact on both shipping costs and times, giving railroads and intermodal shipping a boost.
“There could be some shift back to intermodal, but it will depend on how tight truckload gets post-ELD,” Morgan Stanley analyst Ravi Shanker told industry publication Transport Topics. “There will likely be at least a three- to six- month delay, and volume gains are more likely than pricing gains for intermodal given the closing gap between truckload and intermodal pricing. There will have to be a big ELD impact in truckload for intermodal to gain real traction.”
In the short run, technology and regulation may hamper the trucking industry. Looking forward, it may provide the solution to the long-running driver shortage problem. Around the country, the Department of Transportation is studying different technologies to allow cars and trucks to communicate with each other on the road.
On Tuesday, the Department of Transportation provided an update on its wireless connected vehicle pilot program, which is studying ways to use technology to reduce accidents related to weather and congestion in areas as varied as New York City, Tampa, and the state of Wyoming.
“The goal isn’t to employ connected vehicles with the introduction of technology,” said Ken Leonard, director of the ITS Joint Program Office. “The goal is to get to collision avoidance. We have six million collisions a year, over three million injuries and approaching 40,000 fatalities. And I think the numbers are definitely moving in the wrong direction.”
Eventually, technology may be able to reduce part of the trucking industry’s labor gap. An agreement between the Virginia Department of Transportation, the Federal Highway Administration’s Office of Operations Research and Development, and the private company that owns and operates the 95 and 495 Express Lanes outside of Washington, D.C. would allow for driverless vehicle testing on the roads.
Federal researchers are working to determine the sort of technology necessary to enable cars and trucks to communicate with each other on the highway, forming long caravans that would drive more efficiently. This speed synchronization technology is still a long ways off, but perhaps the days of the convoy are not yet over. Hang on to the CB radios, trucking is here to stay.