The year 2020 has been unprecedented in practically every way. Even the trucking industry, arguably a reliable source of power in the American economy, has been hit hard by the ongoing pandemic. The sector lost nearly 90,000 jobs in April alone, part of a nationwide loss of 20.5 million jobs in response to COVID-19. However, the industry is poised to come out of the current economic hardship and head into 2021 with more growth opportunities from technology to salary. Here’s a better look at what trucking trends to expect going into 2021 and beyond.
Economic Comeback
The need for truckers hauling freight is still in high demand, even with the economy taking a dive earlier in the year due to COVID-19. E-commerce and online shopping have surged this year and will continue to increase in the future, even after the pandemic eventually subsides. This upward trend in shopping online or ordering food delivery means that America will need more drivers to deliver products, including electronics, fresh food, and medical supplies. According to current predictions, trucking freight will grow by six percent in 2021, with stable growth rates when looking at year-over-year evaluations.
Since freight levels will grow, the trucking industry will need to bring on more drivers to meet demand. The industry is in the middle of a shortage of drivers, including a number that might hit 105,000 by 2023. This presents an excellent opportunity for new drivers as they will have multiple job options with higher pay waiting for them.
Improvement of Technology
Technology continues to affect the trucking industry for the better. Corporate trucking companies are starting to employ different software programs to help make their operations more efficient and streamlined while also providing truckers the opportunity to keep an eye on their logistics. Trucking companies now equip trucks with better technology than before, and more trucks are starting to incorporate smart technology to improve the truck’s functionality, including artificial intelligence-backed decision-making software.
Here, artificial intelligence algorithms help improve big data analytics and allow for faster decision-making than human drivers. According to Goldman Sachs, logistics costs could fall by up to five percent during the next ten years due to this technology.
Expect Insurance Rate Increases
For the past ten years, trucking carriers have seen their insurance premiums rise even as coverage shrunk. But while trucking companies grapple with economic hardships of their own, the need for trucking insurance carries on. With this in mind, trucking companies need to invest in adequate trucking insurance to protect their bottom line. Not operating with trucking insurance can cost them more than paying for coverage if an incident occurs.
Being transparent about these rate costs increases and their effects on both trucking companies and consumers is a fair solution. It could also help reduce the financial strain that carriers feel when they try to take on the trucking insurance rate’s weight increases resulting from aggressive legal challenges.
E-Commerce Will Grow
Over the last decade, the e-commerce industry has expanded significantly. In 2019, U.S. e-commerce sales’ total value reached nearly $600 billion, a 15-percent increase from 2018. Still, with the onset of the COVID-19 pandemic and people staying inside more than ever this year, the industry is expected to hit just under $800 billion.
While this all sounds great for the economy, e-commerce can’t survive without logistics and trucking. The industry depends on truckers to get their goods from one location to another. This means that growth and improvements in the e-commerce industry will help lead to better gains in the trucking industry. Because e-commerce will grow higher every year, one can be hopeful that the trucking industry will also experience the same growth.
About Western Truck Insurance Services
Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck, and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.