Trucking Industry Trends For 2019 Onwards
February 28, 2019
February 28, 2019
The trucking industry may appear relatively rigid from the outside, but in truth, it can be quite a changeable beast. We have identified some of the potential trucking industry trends for 2019 – good, bad, and plain interesting, to see what life on the road has in store for the USA this year.
Stabilizing And Rising Rates
While the trucking capacity crunch was a problem for much of 2018, it seems to have “loosened up” coming into 2019, according to brokers in the industry, leading to a fall in rates. However, the same brokers are also of the mind that the market has found a bottom at this point, and with an increase in volume rates should begin to stabilize or start to climb again throughout the year. Tender rejections remain low, meaning that some leeway in capacity still exists, but as volume increases, this will also change.
Two kinds of rates are present in the trucking industry – the spot market rate, and the contract rate. Spot market rates can be thought of as “on-the-spot” rates, for trucks which are ready to go at a moment’s notice. Contract rates are for pre-determined agreements between a carrier and shipper, over a longer period of time. Both of these types of rates are likely to continue to climb as the capacity crunch worsens.
The Driver Shortage Could Lead To More Attractive Jobs For Drivers
The driver shortage may begin to have varying impacts on the trucking industry – as we started to talk about above in terms of increasing rates – and companies will become increasingly desperate to attract new drivers.
This could lead to some interesting changes, such as an increase in trucking jobs whereby drivers will drive shorter routes and be able to return home on a more frequent basis, as opposed to the current normality of drivers being on the road for days or weeks on end, while driving huge distances.
Better handling of detention pay situations is also something that needs fixing, as upwards of 25% of drivers claim that they never receive detention fees, and “only 3 percent of carriers said that they were able to collect detention fees on at least 90 percent of their claims“, according to a DAT survey. These kinds of changes could see an increase in new drivers willing to join companies who will no longer be put off by the anti-social lifestyle and difficult hours.
New Prime Inc. vs Oliveira Supreme Court Case
For a slight change from the usual trends, let’s throw a legal curveball into the mix. Though the case details go fairly in-depth, the case, in essence, stems from truck driver Dominic Oliveira believing his company was taking advantage of him in multiple ways. Firstly, he started an “apprenticeship” scheme which saw him working for free (even becoming indebted to the company). He then worked for the company for less than minimum wage, as well as the company requiring him to set up as an independent contractor, which should legally give him certain amounts of flexibility and independence in his work and the manner in which he performed it. In this case, it meant he was required to lease his truck and buy his equipment from a company which was owned by a sister company to New Prime, and even pay for his own fuel. These are all costs that Prime would usually have to pay for themselves, but in this case, Oliveira footed the bill alone.
New Prime argues that Oliveira has no right to take them to court due to his contract forbidding it, claiming that the Federal Arbitration Act should enforce this and allow them to solve the issue outside of court; however, the Federal Arbitration Act does not itself apply to the “contracts of employment” of transportation workers – which Oliveira is. This is why the case has made its way up to the US Supreme Court, to solve the question of who is in the right.
In January, the Supreme Court ruled that the trucking company, New Prime Inc., cannot compel arbitration. This could have fairly broad implications for employers going forward, due to the prevalence of hiring independent contractors, versus regular employees, within the trucking industry.
Improvements For Self Driving Trucks
Fully-autonomous trucks are a ways off, and may not be on the road without a driver in the cab for a couple of decades, but that doesn’t mean that the underlying technology isn’t making strides. There are several major players who are researching and developing methods to automate trucking fleets, with several novel methods being tested. Several of them, including Daimler, Tesla, and Waymo, are looking into the idea of “truck platooning”, which is the idea that a truck piloted by a human driver leads multiple autonomous trucks, guiding them to their destinations. Various detection systems are also being tested, such as laser-based radar, cameras, and more, but there are still a number of challenges to overcome, due to the size and blind spots associated with a truck that don’t usually show up with autonomous cars.
Even if these advances come to fruition earlier than expected, it doesn’t spell doom for truck drivers. It seems likely that truck drivers will have a place in their trucks for a long time to come, with their roles switching to be more aligned with the situation that airline pilots find themselves in – generally overseeing the smooth operation of the truck during its journeys, stepping in during an emergency situation, and taking manual control as and when needed. There are also some present technological safety concerns such as adversarial attacks, whereby a truck could be digitally “hijacked” and tricking into performing incorrect or dangerous maneuver – having a driver present to take over would avert this problem.
Electric semi trucks are a related technology which we are very excited about.
Advances In Technology
One thing the trucking industry still has some catching up to do on is its reliance on traditional methods, especially when it comes to technology. It’s not uncommon to see Windows 98 as a widespread operating system in trucking offices, faxes being sent to and fro, or paper documents being sent long distances when a digital version would be far superior. This is something we believe is inevitably going to change, and is one of the core philosophies of our own business – we want to make trucking easier, cheaper, and smarter.
Blockchain technology in the supply chain makes tracking goods far easier, faster, and safer. It can entirely eliminate the need for paper from the supply chain via digital documentation, ensures the safety of all information that is stored on it by way of the inherent security features of blockchain technology, and gives instant access to all of this data to the relevant parties. In 2019, keep an eye out for blockchain’s increasing prevalence and how it will begin to change the trucking industry for the better. We’ve written more about this in our blockchain in supply chain and trucking article.
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