2018 Trucking Industry Trends: The Year of the Truck Driver

“This year [2018] will be the best for the trucking industry since 2005”, says David Ross, an analyst at Stifel Financial Corp. 

What makes Ross so confident? It’s all about freight rates, truck sales, and ELDs.  

Learn how 2018 trucking industry trends are hauling the trucking industry towards one of its best years ever.  

freight rates

Freight Rates are Soaring 

According to the American Trucking Associations For-Hire Truck Tonnage Index, January 2018 saw an 8.8 percent increase in freight tonnage compared to January 2017. 

Combine this with the current driver shortage, and you begin to understand why we are seeing record shipping rates in 2018.  It’s all about supply and demand. 

And those who are in the industry can capitalize. In January 2018, freight rates for refrigerated trailers reached $2.66 per mile. That’s a 71-cent increase from the same time last year. 

Similarly, dry van spot rates shot up by 59 cents ($2.26 per mile), and flatbed rates climbed 47 cents ($2.39 per mile) compared to last year. 

Experts expect rates to grow even higher as we move towards spring freight season. 

Truck Sales are Surging 

Many carriers have been investing in new trucks instead of continuing to spin their wheels investing in new drivers. This is due to a combination of the economy’s health, new tax policy, and high driver turnover rates. 

According to Americas Commercial Transportation Research Co. (ACT), big-rig manufacturers received orders for more than 49,100 trucks in January 2018. A 121 percent increase from the same time last year. 

 

 

 

 

 

And Class 8 truck orders just rose to the second-highest level since March 2006. 

Peterbilt is already forecasting sales of a quarter-million Class 8 trucks this year. 

Also, according to ACT, the industry saw a 250 percent increase in refrigerated trailer orders compared to last January.

ELD Mandate Passes Pressure to Shippers 

Interestingly, lingering concerns related to the ELD mandate has partially contributed to rising shipping rates. At least temporarily. 

But, there are also positive long-term ELD effects to expect. 

truck shippers

 

 

 

 

 

 

As you know, ELDs track the exact amount of time a driver spends waiting for loading and unloading. Shippers can be quickly analyzed, compared, and dropped if they are found to be inefficient.

This means shippers will have to work harder and smarter for drivers. 

With such high freight tonnage, and a low number of drivers, the power of choice lies more in the hands of carriers and drivers.  

ELD Mandate: Rerouting the Trucking Industry

Deadline to Comply Looms Near

On December 18th, the Electronic Logging Device (ELD) mandate goes into effect nationwide. The days when truckers could log their miles and hours by hand will soon be in the rearview.

Enforced by the Federal Motor Carrier Safety Administration (FMCSA), the ELD mandate requires truckers to purchase and link a computerized device to their rig’s engine and onboard system. ELDs capture truckers every move: whether the engine is running, whether the vehicle is moving, and where the vehicle is located.

Some large companies, such as FedEx and UPS, have already been utilizing these devices. However, the majority of owner-operators have not.

Under the mandate, truckers will have limited driving time. 11 hours of driving a day within a 14 hour workday. Also, there is a requirement to take 10 consecutive off-duty hours per day.

Less Fatigue or Less Patience?

The intent of these embedded time-trackers is to greatly reduce roadway accidents. ELDs aim to do that by eliminating inaccurate reporting and minimizing the number of fatigued drivers. However, many truckers argue this will only add pressure to their already deadline-driven jobs, which, in turn, will outweigh the positives of reduced fatigue.

In an article by Overdrive Magazine, Darrell Wright, an owner-operator of a three-truck company, explains how this mandate may actually cause more hazardous driving. “If I’m driving 74 miles per hour and I see a car easing up on me, I will usually let off and let the car go on, but after the ELDs go into effect I can’t give that courtesy anymore because every time I let off the accelerator I lose money,” said Wright.

Trading Autonomy for Information

Another concern is data collection. To the FMCSA, constant collection will benefit the industry by clearly communicating driver, truck, and route trends. For example, ELDs can precisely track time spent waiting for loading and unloading. This will expose companies who are consistently making drivers wait unreasonable lengths of time. Theoretically resulting in more efficient shippers.

However, trucking has historically been one of the most independent professions. The idea of being tracked, monitored, and rigidly regulated leaves an unconstitutional taste in the mouths of free-spirited truckers. Most of whom already know their jobs can be done without data pools of information.

Indeed, such a sophisticated device creates a vulnerability to hacking and potential risk to drivers hauling sensitive cargo.

During an interview with Q13 Fox news, President of the United Independent Truckers of America, Harry Singh, said “This is a violation of our privacy.” Singh went on to say, “Having the tracking system in our trucks will allow the government to track us 24 hours a day and that’s not good for privacy and it’s not good for safety reasons.”

With less than one week before the deadline, the FMCSA remains full speed ahead. This, despite legislative delay attempts and ongoing truck-stop protests. Once implemented, a driver caught without an ELD can be fined or even be placed out of service.