What’s Next for Trucking in America?
The telephone, automobile, light bulb, antibiotics and the computer. These are just a few of the inventions that captivated and continue to captivate our society – and all of them first saw life in the 20th century.
A time synonymous with industrialization, innovation and change, the 20th century is without question the most transformative and groundbreaking time humans have ever witnessed.
It comes as no surprise then that the transportation industry was revolutionized many times during the century.
From horse-drawn buggies to freight trains to the more modern trucks and big rigs we see today, this tumultuous industry has ebbed and flowed in unimaginable ways.
The Rise of Trucking in America
To think that as recently as the 1950s and ‘60s, the majority of goods were moved around by rail is astonishing. The rate of advancement that took place once a network of freeways spread out across the country meant that trucking moved at rocket speed – and until very recently, it hasn’t slowed or shown signs of despair.
Along with the freeways, the viability of trucking as a career helped to spur its growth, and for many young men of the 1970s, getting a job in trucking just made sense.
“Back in the day, there were still family farms and gigantic steel mills in Pennsylvania, Indiana, Illinois, Alabama and Ohio,” says Bob Gelley, owner at Steel Dispatch, a trucking and transportation company in Richfield, Ohio.
He says that because the south was still largely agrarian and many jobs were tied to textiles, lumber and food processing plants, drivers started off working on these family farms. Those who didn’t follow suit had few options for a decent living.
“Plus, buying a truck and trailer combo would only set you back $35,000, getting credit was easy and freight rates were run through tariff bureaus that were high enough to cover overhead,” Gelley adds.
Combine all those factors and it’s not hard to see how trucking gained a fast foothold on the transportation market.
The Importance of Trucks
Today, it’s obvious that trucks rule the roads – but do you know just how important they really are? According to data from the American Transportation Association, trucks are responsible for getting nearly every product into the hands of the people who need them.
Shockingly, in just 24 hours with no trucks, hospitals would run out of basic supplies like syringes, food shortages would start to develop and gas stations would run out of fuel.
In four weeks, the nation would exhaust its clean water supply and illnesses would skyrocket.
With statistics like these, it wouldn’t be surprising if you started high-fiving every trucker you come across. After all, they’re at the wheel of every aspect of our lives.
Falling on Hard Times
However, it’s not all good news for transportation and times they are a’changing.
Those gigantic steel mills Gelley mentioned earlier have closed, downsized or started up branches in other parts of the country, and family farms have all but disappeared.
“Truck combinations have gone from $35,000 to $100,000, and diesel fuel is sky high. Banks have fallen on hard times and rarely extend credit to young people to buy trucks,” Gelley says.
For now, he thinks trucks will remain the major conduit between a manufacturer and their customers, at least for the foreseeable future.
But surprisingly, it’s rail that might soon steal its former glory back from the roads:
“As railroad hubs continue to expand, they may take a chunk of the business from the motor carriers,” explains Gelley.
With increasing fuel costs and an eye on carbon emissions, this shift makes sense.
After all, using only one gallon of fuel, a train can move one ton of freight over 480 miles, according to CSX Corporation. That’s 4 times more efficient than a highway truck.
“However, one thing that is not in favor of railroads at this time is their service window and access to both shipper’s and consignee’s loading docks,” Gelley says.
Even without rails barking on the heels of the big rigs, there’s still plenty to worry about.
Those roads that made it so easy for trucking to leap to the front of the pack are now an infrastructural mess, which in turn leads to lengthy delays, accidents and the need for truck repairs.
The government is also stepping in in a big way by deregulating rates and increasing safety requirements.
“With more scrutiny then ever over motor carrier and driver safety scores, the industry will have to adapt to ever changing legislation put in place in an effort to keep our highways safer from fatigued drivers,” says Gelley. “There is no going back to paper logs and motor carriers will need to remain vigilant in the policing of their drivers.”
Obviously an increase in safety precautions is good for everyone – Gelley says the public can more or less rest assured that drivers behind today’s trucks are drug-free and more rested than ever before.
But he adds the flipside is that more federal oversight may reduce motor carrier profitability, and while new motor carriers enter the industry weekly, many close their doors due to escalating costs that continue to erode profitability.
Between repairs, regulations and a drop in the number of drivers on the road, it’s not an easy or fruitful time to be at the helm of a trucking company.
“From what I can see, the larger motor carriers will continue to grow as smaller companies die off and new ones find the costs outweigh the advantages of entering the for-hire truck load business,” says Gelley. “Like any commodity, fewer players can drive up costs and most likely will.”
That could spell bad news for many service centers, distributors and manufacturers who are already struggling on the receiving end of this cataclysmic shift.
Cara Deming, Transportation Manager at Majestic Steel USA is no stranger to the harsh conditions caused in the wake of these changes.
Part of her job is to handle the trucking of steel from Majestic’s warehouses to their customers, processors and holding centers. Lately, she says it’s getting harder and harder to get things scheduled and moved.
In the last year, Deming says the rising operation costs and increased regulations have caused smaller companies to shutter. “Reduced carrier capacity continues to drive an increase in rates,” she adds.
Solid relationships and an emphasis on day-to-day communication with carriers has helped manage the issues somewhat, though it’s grown increasingly difficult to predict what will happen next. That’s why Deming and her team do whatever’s possible to minimize disruptions the best they can.
“We have a lot of carriers that are very loyal to Majestic and we do our best to keep these carriers busy so they keep coming back for loads,” she says. “We also have late loading hours which gives us an edge over other shippers in northeast Ohio.”
Still, even with these measures in place, there’s no denying that sweeping, large-scale changes will affect the way transportation is handled.
The Future of Transportation
In terms of trends, Gelley says intermodal transportation is on the upswing and appears to be a segment that should experience some significant growth over the next few years.
Using intermodal containers, freight is moved from one form of transportation to another without any handling of the freight when changing modes. According to Wikipedia, “The method reduces cargo handling, and so improves security, reduces damage and loss, and allows freight to be transported faster.”
Even in the case of intermodal transport, trucks still have a place at the table as a way to connect ocean and rail segments. Truckers could see short connection hauls increase, even if longer haul routes decrease.
Further, technological increases could also help solve some of the problems associated with government regulations.
For example, Daimler’s Freightliner recently unveiled the Inspiration Truck, a self-driving big rig that’s making waves in the industry.
Slated to reduce driver fatigue and stress while also reducing carbon emissions up to 5 percent, the Inspiration Truck could be a good sign of what’s to come as trucking looks to re-define its role in America’s transportation game.
While a bumpy ride could take place over the next few years, transportation companies and truckers on the road are busy changing gears to accommodate whatever comes their way.