With ever rising fuel prices, stagnant cargo rates and increasing regulation, you might be worried about the state of the trucking industry. Are you going to be able to earn enough to support your family? What does the future hold? While we don’t have a crystal ball and can’t predict the future, careful analysis of the industry can shed some light on what changes you can expect in the coming months.
A series of recent investment reports about the trucking industry by Stiefel provide some valuable insights into what you may see in the weeks ahead. Let’s take a look:
· 52% of Truckload Carriers Expect Volumes to Grow Over the Next 12 Months– Increased volume means more work for truckers and higher rates, a very good thing for the industry.
· CSA Scores Matter-80% of those surveyed indicate that some of their clients care about the safety scores of their drivers. Safe driving will not only help you to impress with your CSA scores, but also obtain the lowest possible rates on your insurance.
· Driver Turnover Expected to Increase– As the economy continues to recover the turnaround for drivers is expected to increase from 100% to 150%, the level where it was before the recession. Truck drivers tend to switch between industries and as construction and other industries need more workers, driver turnover is expected to increase.
· Sleep Study Requirement Could Lead to Shortages– If the FMCSA’s proposed sleep study requirement for high BMI drivers passes, a real driver shortage could result. Half of commercial licensed drivers have a BMI over 30. Sleep testing costs as much as $5,000. Many truckers will likely switch industries rather than submit to the testing. Fewer drivers could mean more money for those that remain.
· Environmental Regulations Have Biggest Impact on Owner Operators– Potential new EPA regulations for fuel mileage could have a big impact on owner operators and smaller fleets. Increasing mileage will require big equipment changes. Smaller operations generally purchase equipment that can do multiple jobs; efficiency requirements may lead to highly specialized equipment that can only do one or two jobs.
· Increased Expenses– The newer more efficient engines require more frequent maintenance. 40% of fleets reported increased expenses with the new 2010 engines while only 10% noted a decrease.
· More Owner Operators Expected– Currently half of those receiving operating authority from the government are owner operators. As lease agreements become less lucrative, people decide to go at it alone. Stiefel expects many more owner operators in the coming months.
· Less Reliance on Brokers– Carriers are choosing to use freight brokers less often. Brokers are most commonly used by companies making less than $25 million annually.
· ELogs Becoming More Common-ELogs are becoming more common. Currently 42% of larger fleets are using them compared with 12% of smaller fleets. Some drivers are choosing to leave the industry rather than comply with these logs since they unveil unsafe driving practices fairly effectively.
· Driver Shortages May Get Worse– While unemployment rates still hover at about 7.5%, in the trucking industry there are shortages of workers and they are expected to get worse. Increased regulation may lead to more drivers leaving the industry. Overall there are shortages in many areas in the industry: safety people, mechanics, drivers, etc.
What do you predict will happen in the coming months for the trucking industry? How will these predictions impact the way you drive? While the industry is constantly changing, one thing will always remain the same: we strive to bring you the best rates on great insurance.