December 30, 2019
Top 10 Hurdles for Trucking in 2019
High Demand, Low Volume
It may come as a surprise to many but 2019 has been a challenging year for the trucking industry. While demand has been high, it has not come close to the volume of 2018 and therein lies the problem. Expectations were set by a record-breaking metrics in 2018 including a U.S. Gross Domestic Product at a 3.5% rate and a jobs report in the 3rd quarter showing approximately 313,000 positions added. Based on the growth and confidence in the market, companies from large to small decided it was the best time to invest in themselves. Last year alone, a record number of orders for class 8 trucks were placed indicating how confident carriers and companies were for the year ahead. Unfortunately, the windfall did not last through the year and the 4th quarter was down. Load volumes decreased as much as 4%. Unfortunately, that volume decrease was not a positive indicator for 2019 and consequently, trucking companies across the country had to adapt to the fallout and challenges compounding their efforts.
The Trucking Industry: A forecast for the Economy
Trucking companies have started to see a downturn as of the third quarter of this year. Jennifer Kuntz, President of D&D Transportation Services in Gooding, Idaho indicates that freight rates have dropped drastically with all of her major customers. She goes on to say that they are seeing carriers go out of business daily and larger companies shutting down entire divisions.
Trucking always sees the economy turn before anyone else, and although we don’t like to predict a recession, the trends have started to point in that direction. — Jennifer Kuntz, President, D&D Transportation Services
Bob Costello, ATA’s chief economist and senior vice president of international trade policy and cross-border operations agrees with that trend and although he isn’t sure that a recession is coming, or when, but he does sense that something is amiss.
Top 10 issues for Trucking in 2019
The American Transportation Research Institute’s survey provided valuable insight into just exactly what the biggest challenges were for both carriers and drivers. With more than 2,000 carriers polled, the survey results were as follows:
1. Driver Compensation - While drivers are benefiting from increased pay, there is concern that driver compensation has not kept pace with inflation and that drivers are not compensated adequately for non-driving duties such as detention wait times.
2. Hour of Service - FMCSA has issued a proposed rulemaking to make changes to the 30-minute rest break, and add flexibility in the sleeper berth provision that would allow drivers to split their off-duty time into an 8 and 2-hour, or 7 and 3-hour split, with neither period counting against the 14-hour driving window. (See DAT blog: FMCSA proposes new changes to Hours of Service regulations)
3. Truck Parking - The lack of available truck parking creates a dangerous and costly dilemma for truck drivers who are often forced to drive beyond allowable HOS rules or park in undesignated and, in many cases, unsafe locations. (See DAT blog: Technology tackles trucking's parking problem)
4. ELD Mandate - Following full implementation of the mandate in December 2017, the industry’s attention is now focused on the approaching deadline for fleets to transition from AOBRDs to ELDs by Dec. 16, 2019. (See DAT blog: AOBRD vs. ELD: Will the switch-over jumpstart rates?)
5. Driver Detention - Delays have cascading impacts on a driver’s ability to comply with the HOS rules, negatively affects their earnings, and can force drivers to park in unauthorized or undesignated parking if they run out of available on-duty hours before reaching a safe parking location. (See DAT blog: "Detention is Killing Us" Say Carriers)
6. Speed Limiters - Mandatory speed limiters on trucks were part of a Proposed Rulemaking in 2016 but were never finalized. The issue dropped off the radar with the Trump administration's reluctance to implement new regulations, but the issue could re-emerge in the future. (See DAT blog: Trucking Regulations: What's In? What's Out?)
7. Driver Training Standards - Earlier this year, FMCSA announced that it was delaying implementation of two key provisions of its Entry Level Driver Training Rule, frustrating many in the industry. Once implemented, the rule will include minimum standards for driver training schools as well as new instructor qualifications.
8. Driver Distraction - According to the National Highway Traffic Safety Administration, more than 3,000 people were killed in motor vehicle crashes involved distracted driving in 2017. The impacts of driver distraction are witnessed by commercial drivers each and every day.
9. Infrastructure/Congestion/Funding - Poorly maintained roads and traffic congestion create wear and tear on vehicles, waste fuel and increase emissions, create additional stress for drivers, and negatively impact industry productivity.
10. Autonomous Truck Technology - Although it may be decades before a fully autonomous vehicle is commercially available, the technology is advancing rapidly, and as these advancements enter the marketplace, the responsibilities of truck drivers could dramatically shift.
While both carriers and drivers had to contend with many of the same issues, carriers were faced with additional concerns like tort reform, Insurance costs and availability as well as compliance, safety and accountability (CSA).
With 2019 at a close and the biggest holiday buying season on record, the industry is hopeful that the adaptations they made this year to overcome the hurdles will lead to a strong and sturdy 2020.
RESOURCES:
https://www.ttnews.com/articles/trucking-industry-expected-see-slower-growth-2019
https://www.dat.com/blog/post/top-10-issues-for-truck-drivers-in-2019
https://www.freightwaves.com/news/why-2019-has-been-the-worst-year-for-trucking-operators
