Over the past one year, the trucking industry has witnessed tremendous changes when it comes to the manner in which they operate and the kind of trucks that are making their way to the market spaces. In the United States alone, the industry has witnessed its ups and downs during the year, all of which have impacted the overall production and development within this space. There have been numerous things that have impacted the manner in which the industry has functioned and there have been numerous elements that have changed the way work is received within this industry. With us being so close to 2020 it is time to take a look at some of the trends that are likely to surface in the coming year to see how they would truly impact the industry.
Industries all over the world are experiencing rapid development owing to the incredible application of technology that is now being experienced. Here are 10 trends that are likely to surface in the coming year within this industry:
1. Carrier Bankruptcy
Over the past few months, several large and small trucking companies have closed their doors for business owing to harsh market conditions that are currently prevalent within this industry. Currently at least three thousand truckers are unemployed owing to the closing down of these company’s, leading to the growing number of people who are unemployed. One of the reasons for this is also because of the shortage of movement of goods. Retail companies are moving fewer goods from one place to another, causing many trucking companies to lose out because of lack of work. This has resulted in them going under, causing a drop in profitability within this industry. The trend is not likely to change in the coming year unless there is a large spike in the retail industry and if there is a significant increase in the flow of freight.
2. Improvement Of Technology
Technology has caused widespread improvements to a number of industries and the trucking industry is not exempt from this. Right from the corporate offices of trucking companies to the very trucks themselves, technology has been improving. Corporate offices are beginning to employ a number of software programs to help make their operations more efficient and streamlined. Trucks that are being used are now being equipped with far better technology than ever before, and more trucks are beginning to incorporate ‘smart’ technology to improve the functionality of the vehicle. The concept of ‘tracking an order’ is also something that has caused many trucking companies to have to set up technology that helps them keep track of the goods that are being carried about, and also because they have to convey this information to the customers buying the goods.
3. Higher Number of Mergers
While a large number of companies within this industry are going under as a result of the harsh market conditions, many companies are choosing to go down the alternative route and merge with other companies. Many trucking companies are likely to move in this direction in 2020 if the market doesn’t improve and if trucking companies don’t have any other alternative to turn to. When it comes to mergers, there are two main routes that trucking companies are likely to divulge into. The first one is to merge with an existing trucking company to be able to pool the resources together and withstand the market. This allows companies to continue their operations, and maybe even expand to newer territories. The second route that trucking companies can take is to merge with a company of a different sector to be able to expand the range of services that they can provide. This would then help them stay afloat until the market comes to a more favorable point.
4. Shift In Production Locations
Over the past few years, the production locations for some of the most well-known trucking companies have remained constant and is a business that has only grown with time. However, companies are starting to look at newer locations to be able to conduct their production operations and to be able to meet the demand for trucks that currently exists.
- When it comes to Dry Vans, Texas, Illinois and Ohio stand as some of the locations that companies are likely to shift to.
- For Reefers, California and Illinois are the preferred locations.
- Flatbed vehicles are mainly being produced in the state of Texas and Pennsylvania, and are likely to continue there through 2020.
The trend of shifting to a new location is not exclusive to the trucking industry and is something that is being witnessed across the entire transportation and freight industry.
5. A Market Flip
While the trucking industry might not be in the best market situation currently, there are some experts who are enthusiastic and optimistic about 2020 and all that it is likely to bring. Because of the decline that the industry experienced during 2019, many believe that the industry is likely to turn around and experience a gradual increase as a result of the new developments that are coming to this industry. A market flip is expected to emerge in 2020 and is something that can truly help the entire industry and one factor that can help save the several companies that are likely to go under unless the current conditions within the market improve.
6. Changes in Pricing
The pricing that truckers currently operate at is considered to be incredibly low, so much so that truckers earn far less than the average American. During 2019, the pricing that truckers worked with experienced a significant decline because of the shortage of jobs. Trucking companies started to charge less for fear of not being able to get work at all. In 2020, the pricing that trucking companies are likely to change, either for the better or worse. If the market continues to experience a decline, trucking companies are going to have to lower their prices even further. If the industry experiences positive growth, the prices can rise back up to what they were before the decline. Either way, there is no doubt that there are going to be significant changes to the pricing when it comes to the trucking services that companies offer.
7. Influence of E-commerce
Over the past few years, the e-commerce industry has grown tremendously, and we currently live in a world where people prefer to shop online than in-store. The wide variety available online as well as the fast fashion that comes with it has made this industry bloom and has helped it become one of the most successful industries today. However, it is important to note that the e-commerce industry cannot function without the help of the trucking industry. This industry is dependent on truckers to get their goods from one place to another, and this means that improvements in the e-commerce industry will lead to improvements within the trucking industry. Because the e-commerce industry is likely to grow further in 2020, one can be hopeful that the trucking industry also experiences some positive growth.
8. Rising Fuel Costs
Over the years, fuel costs have only risen because of the limited nature of this resource, and this always has an impact on the trucking industry. Fuel has always been one of the bigger factors when accounting for the expenses that trucking companies have to incur, and the rising costs of fuel have always been a matter of concern for companies operating within this industry. However, the solutions present for this are far more than what the industry had in the past. Today, trucking companies can opt to go in for alternative fuel trucks or even electric trucks to cut the costs that they would have to spend on fuel on a day to day basis. However, this does mean that an investment needs to be made for these new vehicles, which is often an expense that trucking companies currently cannot incur.
One of the more beneficial developments that the industry is likely to experience in the coming year is the growth of urbanization. Over the past few years, most of the country has experienced wide-scale development, with most rural areas being converted into urban landscapes. This means that it is easier for trucks to be able to traverse through parts of the country that they weren’t able to traverse through before. This means that the trucking industry is now able to widen their scope and reach and is able to offer its services to a much wider customer base, thereby helping them generate significantly more business in the process. Most of the rural areas in the country are likely to have access to all the necessities that urban cities depend on, making it possible for companies within this industry to expand their business even further.
10. Incorporation of Data Analytics
Data Analytics is an important tool that businesses around the world are looking to incorporate and is something that has helped boost the overall impact that businesses have. Many companies in the trucking industry have already realized the benefit of incorporating data analytics into the work that they do, and more companies are likely to follow in their footsteps in the coming year. In 2020, data analytics is not only going to be applied to the work that corporate spaces do, but also for the actual vehicles that are on the road. Several vehicles are being developed with technology that can send information to a source regarding the route and information regarding the operations that it is currently engaged him. This technology can help the trucking industry identify the areas that need development and also helps them understand the areas that they can improve on when it comes to making their operations more efficient.
All of these developments are likely to alter the manner in which the trucking industry is likely to function in 2020.
10 Must-Know Statistics
While the predictions being made about market statistics in 2020 are subject to change due to market instability, the statistical data is used to back up these claims remains the same. For anyone who wants to be familiar with the ins and outs of the trucking industry, being familiar with the current statistical data behind it is incredibly important. Here are 10 must-know statistics regarding the trucking industry and the developments that it experienced over the past year.
- Highest GDP In The World – The United States currently stands at the number one spot when it comes to GDP from the trucking industry. The GDP of this industry is higher than that of 150 nations in the entire world.
- The Job Percentage – The trucking industry takes up a notable chunk of the U.S employee market with more than 5.8% of jobs in the country being related to the trucking industry.
- Biggest Employer – Walmart currently stands as a company that has the most number of hired truckers, standing at 8,600.
- Total Weight Carried – In the United States, trucks carried approximately 10.8 billion tons of goods across the country.
- Preferred Form of Transportation – Almost 70% of the goods transported in the country are carried around by trucks from one state to the other.
- Job Diversity – The trucking industry has an incredible amount of diversity with more than 40% of the jobs being held by people belonging to minorities.
- Grocery Store Dependence – Grocery stores are incredibly dependent on truck drivers to carry their goods and most grocery stores would run out within three days if truck drivers stopped delivering their goods.
- Job Demand – There is an ever-growing demand for truck drivers and experts believe that the trucking industry needs to hire at least 900,000 more people to meet the growing demand for truck drivers.
- Annual Income – In spite of the large demand for truck drivers, the annual income of those working in this position is significantly less as compared to the annual income of most Americans.
- Miles Per Year – Truck drivers put in countless hours into the work that they do, and the average truck driver logs in more than 100,000 miles every single year.
Thanks for reading "Trends That Will Transform The Trucking Industry Outlook in 2020", by the Linchpin Team in Chicago, Raleigh, and Wake Forest.