Trucks move America<\/h2>\n\nTrucks carry most of the tonnage and value of freight in the United States….In 2011 nearly 14,530 miles of the NHS carry more than 8,500 trucks per day on sections where at least every fourth vehicle was a truck.\u00a0 With each truck carrying an average of 16 tons of cargo, 8,500 trucks per day haul approximately 50 million tons per year. US Bureau of Transportation Statistics<\/a><\/p>\n<\/blockquote>\nTrucks are fundamental to American commerce and consumerism. Even the vast quantities of product moved by barge and rail are ultimately delivered to the point of sale or use by trucks.<\/p>\n
<\/p>\n![\"long-haul-truck-driving](\"https:\/\/lantech.com\/wp-content\/uploads\/2020\/10\/long-haul-truck-driving201.jpg\")
Cost fluctuations and perturbations in the trucking ecosystem have the potential, therefore, to disrupt commerce as changes occur and a new equilibrium is sought. After all, how many of us routinely approve quotes and invoices that reflect the fuel surcharges which were originally imposed when fuel prices were 100% higher than they are now?<\/p>\n
It’s important for anyone in the material handling and logistics space to stay abreast of trends in order to position oneself for personal professional success and to help position your company for resilience. The challenge is understanding trends – because in periods of disruption it’s risky to simply extrapolate current conditions into the future.<\/p>\n
Today’s LTL trucking industry provides a great case study.<\/p>\n
Long-term growth<\/h2>\n
While 3D printing may gradually disrupt manufacturing, and therefore logistics, transportation management and trucking, it’s unlikely to have too large an impact for the next decade or two. In fact, the US Bureau of Transportation Statistics forecasts a significant increase.<\/p>\n
\nThe number of NHS miles carrying large volumes and high percentages of trucks is forecast to increase dramatically by 2040.\u00a0 Segments with more than 8,500 trucks per day and where at least every fourth vehicle is a truck are forecast to reach 42,000 miles, an increase of more than 175 percent from 2011. US Bureau of Transportation Statistics<\/a><\/blockquote>\nAs a forecast that’s inherently subject to known (presumably embedded) and unknown factors which by definition aren’t incorporated into that estimate.<\/p>\n
What will the trucking industry look like in 2030 or 2040? It’s probably a safe premise that there will be more products moved by truck than in 2017.<\/p>\n
But the Devil is likely to be in the details as the saying goes….and the transition won’t be linear; there will be ups and downs. And for some stakeholders the experience may be counter to trend.<\/p>\n
Oversupply of trucks<\/h2>\n
Based on rates for the last several years freight carriers have constrained fleet purchases. Basically, based on demand for freight, there’s been an oversupply of trucks.<\/p>\n
There are early indications that may be starting to change. On March 3rd the Wall Street Journal reported that “Heavy-Duty Truck Orders Rose for Fourth Straight Month.<\/a>” The article interprets the data to indicate that “trucking companies may be expanding fleets as freight rates start pulling out of slump.” It noted, however, that an increase may only be a relative indicator rather than absolute, quoting Kenny Vieth of ACT research who said “2016 was just such a bad year for orders that 2017, even if it’s mediocre, is going to shine by comparison.” (Want a stream of stories like this? Consider following @WSJLogistics<\/a>.)<\/p>\nIs this a blip or a trend? Nobody knows – it will take some months, or perhaps years for enough data to accumulate to draw conclusions.<\/p>\n
But it’s an LTL trucking trend worth watching – one of several.<\/p>\n
Shortage of drivers<\/h2>\n\nIn 2006, the U.S. trucking industry employed 1.8\u00a0million drivers of heavy trucks…Very few new hires are expected in the near future, resulting in a driver shortage…Employee turnover<\/a> within the long-haul trucking industry is notorious for being extremely high. In the 4th quarter of 2005, turnover within the largest carriers in the industry reached a record 136 percent, which means for every 100 new employees hired, 136 quit their jobs. Wikipedia<\/a><\/p>\n<\/blockquote>\nJust how bad is the shortage and what’s causing it? Cerasis often revisits the driver shortage as a theme in its exploration of various manufacturing and logistics topics. In the May 3, 2016 article “The Current State of the Driver Shortage in 2016<\/a>” they included some interesting statistics:<\/p>\n\n- The shortage of truck drivers is likely around 100,000<\/li>\n
- The American Trucking Association expects that trucking companies will have to hire 89,000 new drivers annually to eradicate the shortage<\/li>\n
- Costs of managing turnover are enormous<\/li>\n
- If truck driving pay had kept pace with inflation, the average salary of roughly $38K in 1980 would be $111,000 today – yet truck drivers earn an average annual wage of $54K<\/li>\n
- Regulations (hours on the road) and technology (engine governors) mean fewer hours and miles covered\/driver\/day<\/li>\n
- The percentage of female truck drivers will increase (although cab and controls designs focused on an average 5’10” 213lb male driver are often poorly suited to an average 5’4″ 160lb female driver – check out this cool infographic for more info<\/a>)<\/li>\n<\/ul>\n
When Cerasis revisited the driver shortage topic on January 27, 2017<\/a> they focused on the incremental impact on driver supply of 2016 regulations including electronic logging devices, drug and alcohol testing and even sleep apnea testing all contribute to “growing pressure on the industry.”<\/p>\nSo….even while rates have been low and there have been fewer trucks, there have been even fewer drivers. And the driver shortage is likely to become more acute as regulations and pay constrain supply at the same time truck fleets seem to be growing.<\/p>\n
The question is “what gives?” After all we all still expect to be able to select from a full range of products when we shop. More products are going to be delivered. How? Before you jump to drones, let’s take a look at self-driving developments.<\/p>\n
Driverless truck technology<\/h2>\n
Markets abhor a vacuum as the saying goes, and the absence of adequate qualified drivers has created a vacuum. Traditional approaches of talent management haven’t filled it and technology entrepreneurs are stepping in to do so leveraging the coincidental convergence of driverless vehicle technology. (Interested in how this is impacting operations inside warehouses? Check out our recent article on AGVs<\/a>.)<\/p>\n
Trucks carry most of the tonnage and value of freight in the United States….In 2011 nearly 14,530 miles of the NHS carry more than 8,500 trucks per day on sections where at least every fourth vehicle was a truck.\u00a0 With each truck carrying an average of 16 tons of cargo, 8,500 trucks per day haul approximately 50 million tons per year. US Bureau of Transportation Statistics<\/a><\/p>\n<\/blockquote>\n Trucks are fundamental to American commerce and consumerism. Even the vast quantities of product moved by barge and rail are ultimately delivered to the point of sale or use by trucks.<\/p>\n <\/p>\n It’s important for anyone in the material handling and logistics space to stay abreast of trends in order to position oneself for personal professional success and to help position your company for resilience. The challenge is understanding trends – because in periods of disruption it’s risky to simply extrapolate current conditions into the future.<\/p>\n Today’s LTL trucking industry provides a great case study.<\/p>\n While 3D printing may gradually disrupt manufacturing, and therefore logistics, transportation management and trucking, it’s unlikely to have too large an impact for the next decade or two. In fact, the US Bureau of Transportation Statistics forecasts a significant increase.<\/p>\n The number of NHS miles carrying large volumes and high percentages of trucks is forecast to increase dramatically by 2040.\u00a0 Segments with more than 8,500 trucks per day and where at least every fourth vehicle is a truck are forecast to reach 42,000 miles, an increase of more than 175 percent from 2011. US Bureau of Transportation Statistics<\/a><\/blockquote>\n As a forecast that’s inherently subject to known (presumably embedded) and unknown factors which by definition aren’t incorporated into that estimate.<\/p>\n What will the trucking industry look like in 2030 or 2040? It’s probably a safe premise that there will be more products moved by truck than in 2017.<\/p>\n But the Devil is likely to be in the details as the saying goes….and the transition won’t be linear; there will be ups and downs. And for some stakeholders the experience may be counter to trend.<\/p>\n Based on rates for the last several years freight carriers have constrained fleet purchases. Basically, based on demand for freight, there’s been an oversupply of trucks.<\/p>\n There are early indications that may be starting to change. On March 3rd the Wall Street Journal reported that “Heavy-Duty Truck Orders Rose for Fourth Straight Month.<\/a>” The article interprets the data to indicate that “trucking companies may be expanding fleets as freight rates start pulling out of slump.” It noted, however, that an increase may only be a relative indicator rather than absolute, quoting Kenny Vieth of ACT research who said “2016 was just such a bad year for orders that 2017, even if it’s mediocre, is going to shine by comparison.” (Want a stream of stories like this? Consider following @WSJLogistics<\/a>.)<\/p>\n Is this a blip or a trend? Nobody knows – it will take some months, or perhaps years for enough data to accumulate to draw conclusions.<\/p>\n But it’s an LTL trucking trend worth watching – one of several.<\/p>\n In 2006, the U.S. trucking industry employed 1.8\u00a0million drivers of heavy trucks…Very few new hires are expected in the near future, resulting in a driver shortage…Employee turnover<\/a> within the long-haul trucking industry is notorious for being extremely high. In the 4th quarter of 2005, turnover within the largest carriers in the industry reached a record 136 percent, which means for every 100 new employees hired, 136 quit their jobs. Wikipedia<\/a><\/p>\n<\/blockquote>\n Just how bad is the shortage and what’s causing it? Cerasis often revisits the driver shortage as a theme in its exploration of various manufacturing and logistics topics. In the May 3, 2016 article “The Current State of the Driver Shortage in 2016<\/a>” they included some interesting statistics:<\/p>\n When Cerasis revisited the driver shortage topic on January 27, 2017<\/a> they focused on the incremental impact on driver supply of 2016 regulations including electronic logging devices, drug and alcohol testing and even sleep apnea testing all contribute to “growing pressure on the industry.”<\/p>\n So….even while rates have been low and there have been fewer trucks, there have been even fewer drivers. And the driver shortage is likely to become more acute as regulations and pay constrain supply at the same time truck fleets seem to be growing.<\/p>\n The question is “what gives?” After all we all still expect to be able to select from a full range of products when we shop. More products are going to be delivered. How? Before you jump to drones, let’s take a look at self-driving developments.<\/p>\n Markets abhor a vacuum as the saying goes, and the absence of adequate qualified drivers has created a vacuum. Traditional approaches of talent management haven’t filled it and technology entrepreneurs are stepping in to do so leveraging the coincidental convergence of driverless vehicle technology. (Interested in how this is impacting operations inside warehouses? Check out our recent article on AGVs<\/a>.)<\/p>\nCost fluctuations and perturbations in the trucking ecosystem have the potential, therefore, to disrupt commerce as changes occur and a new equilibrium is sought. After all, how many of us routinely approve quotes and invoices that reflect the fuel surcharges which were originally imposed when fuel prices were 100% higher than they are now?<\/p>\nLong-term growth<\/h2>\n
\n
Oversupply of trucks<\/h2>\n
Shortage of drivers<\/h2>\n
\n
\n
Driverless truck technology<\/h2>\n