Truck Drivers Market Outlook: Challenges and Boons

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Research shows that 3.5 million people in the United States work as truck drivers. Are you one of them?

If so, you know that the last two years saw a mix of great success within the trucking industry, coupled with periods of great decline.

After employment numbers dipped significantly during the recession, they reached an all-time high. Yet, this relief was offset by hundreds of company failures and more than 24,000 trucks removed from the nation's capacity.

However, professional sectors tend to ebb and flow, and the truck drivers market is no different. 

Will this year see the same back-and-forth action for truckers? Or is the trucking industry ready for a period of sustained growth? Read on to learn what experts predict for the truck drivers market.

Promising Market Corrections

At the beginning of this year, it appeared there were myriad conditions working in favor of the trucking industry. These included a healthy and improving economy, increased freight demand and new trade agreements designed to bring manufacturing back online.

As a result, market confidence was high and experts predicted that the latter half of this year would be one of the strongest the industry had seen yet. First, though, they had to recover from the previous year.

Last year, the heavy-hitting company failures happened to some of the most established industry incumbents, including Celadon, Falcon Transport, and New England Motor Freight. These events occurred primarily due to market overcapacity.

After the boon, the industry became flooded with hopefuls looking to cash in on the lucrative trucker business. However, when demand wasn't robust enough to balance the supply, chaos ensued. Prices were driven to rock bottom, competition soared, and smaller or weaker companies were not able to continue operation.

While the trucking market appears to be slowly correcting itself, the economy for smaller trucking companies remains a top concern. This is also the case for bigger entities carrying large debt loads, who could not sustain the impact of a weak spot market.

Costly Expenditures

Another factor working against the favor of smaller trucking companies in the coming year? In addition to keeping up with industry power players, they're also facing rising costs associated with new regulations.

First, the Federal Motor Carrier Safety Administration (FMCSA) has set new requirements for entry-level driver training, which went into effect in February. These requirements set minimum standards for CDL schools, along with new teacher qualifications, curriculum mandates and more.

Then, there are new gas mileage standards to contend with, driver safety requirements to meet, and Electronic Logging Device (ELD) technology to install. At the same time, trucking managers must balance these costs with peaking transportation insurance rates.

Faced with the responsibility of complying with the new mandates, it's expected that even the most well-established companies will experience a slowdown.

Qualified Labor Shortage

Even if demand ramps back up, will there be enough qualified laborers to fill the supply?

As it has for years, there exists a shortage of experienced, certified drivers within this industry. As carriers struggle to recruit and hire new drivers, those who are already in that limited pool are requesting higher wages.

Then, there's the issue of Amazon's new in-house truck driver fleet, and the kind of effect the branded tractors will have on the already-scarce labor pool. Rather than sourcing incumbents, it's expected that the online retail giant will hire and train its own team of drivers instead.

In response to these perceived threats, it's expected that one of the trucking trends for this year will be increased mergers. In the right situation, these would allow trucking companies to pool their resources together to continue operation amid lean market conditions. 

Volatile Diesel Prices

The American Transportation Research Institute (ATRI) reveals that the per-mile costs for truckers as a whole grew by 7.7% last year. A major contributing factor? The price of fuel increased by 17.7%.

Now it appears as though the increase isn't going anywhere any time soon. In fact, new low-sulfur marine fuel rules are expected to keep them at current levels for at least one more year.

Trade Negotiations With China

Before he left office, former President Trump signed an important trade agreement with China. The agreement aims to bolster exports from both U.S. farmers and manufacturers and simmer tensions between the two economic superpowers.

For the trucking industry, this act was welcome news.

In addition to boosting U.S. manufacturing, it also increases the exports of American goods and helps provide supply chain stability. This is a bright spot in the future of the trucking industry, offering a much-needed reprieve from the concerns that still plague it.

The Impact of COVID-19

Until early March, the industry appeared to be holding steady. Then, the COVID-19 coronavirus pandemic swept the world and upended any semblance of stability.

As delivery demands spike but consumer confidence wanes, the trucking market is experiencing a new degree of whiplash. On one hand, trucking shipments to essential businesses, including grocery and discount stores, are soaring.

Yet, most other shipping customers, especially those in the retail and non-staple consumer goods spheres, are lying low. 

This general decline offsets any gains made in the essential business sector. Drivers race to meet customer demand for perishables, paper products, and cleaning supplies, but then have no cargo to fill their trailers on the return trip. In turn, this is forcing carriers to run more trucks on empty than planned according to the Department Of Transportation (DOT)

Moreover, once those deliveries are made, drivers are faced with unprecedented new difficulties.

Not only are roadside restaurants closed, along with local businesses. There are also shortages of hand wipes and sanitizer that these workers rely on to stay well. In addition, many shippers are now requiring drivers to comply with wellness checks, take their temperatures, or sign health affidavits.

As we continue to move forward in this crisis, its direct effect on the trucking industry remains to be seen.

A New Direction for the Truck Drivers Market 

Analyzing the truck drivers market recently, it appeared that although there were some conditions that could weaken its infrastructure. The environment was ripe for a turnaround in the trucking market.

New trade agreements, higher demand, and a recovering economy were the major pluses, expected to triumph over volatile fuel prices, labor shortages, new self-driving technology on the horizon, and costly regulations. 

In the wake of COVID-19, the trucker industry's promising rise isn't as cemented. The global economy as a whole is still struggling to adapt to what this new normal means and how it affects each industry. 

Moving forward, the truck driving sector will be as vulnerable as any other to the long-term effects that this crisis could bring in the coming years.

Want to stay up-to-date on business and lifestyle news you can trust? Keep reading our blog for more on the truck drivers market and other transportation topics. We have all the insights you need, including this post on how to keep the kids entertained as we all learn the meaning of social distancing.

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