When it comes to the future of the trucking industry, there are many factors that are altering its trajectory. According to Sanjay Rishi, VP and truck industry leader for IBM, “Tomorrow’s winners must take decisive actions today in the areas of globalization, brand development, technology integration, partnerships, and workforce transformation.”
54% of the executives surveyed in The Global Truck 2020 Study: Transcending Turbulence claimed that globalization is one of the major factors impacting the industry, impacting the manufacturing of light vehicle manufacturers, the development of supply chains, and the standardization of processes.
Another significant factor is sustainability, which has put into play increasingly strict regulations on standards for environmental and fuel efficiency. As governments become more knowledgeable about the negative impacts of pollution and how commercial trucks contribute to this, new safety measures and rules will continue being instituted.
Lastly, 71% of survey participants claimed that advancements in technology including telematics, analytics, and more will play a significant role in altering the future of commercial trucking. The growing popularity of electric vehicles, predictive technology, and communication devices can potentially lead to greater safety and sustainability for trucks.
Top Challenges Faced by Commercial Trucks
In today’s rapidly shifting world, the commercial trucking industry is facing a large host of challenges. An annual partnership between The American Transportation Research Institute and the American Trucking Associations surveys motor carrier personnel, commercial drivers, and other industry stakeholders to determine the key issues they experience.
Truck Coverage & Insurance
Having the proper insurance for your truck or fleet of trucks is super important. No matter the type of truck you drive, finding flexible cover for truck insurance is very important and there are carriers out there that can put the right truck insurance in place to fit your needs.
For the fourth year in a row, the trucking industry faces a driver shortage despite the impacts of the COVID pandemic. More recently, freight levels are returning to pre-pandemic numbers. Some factors that contribute to this issue include the retirement of older drivers and those who have quit their jobs due to health concerns brought about by COVID.
In order to address the effects of the driver shortage, increasing driver pay is a potential remedy. In 2020, this issue has risen by one spot, making it an important area to address in terms of higher pay and employee benefits. According to 2019 figures from American Trucking Associations, the average annual pay for a solo van driver is close to $58,000.
While the lack of truck parking has always been an area of concern for commercial truck drivers, the pandemic has raised the severity of this issue due to a number of states closing down public rest areas. For some drivers, they found that the process of finding truck parking was “somewhat harder” or “much harder” to find during the pandemic.
Compliance, Safety, and Accountability
To promote greater safety throughout the trucking industry, participants encourage the FMCSA to continue working on and promoting the Crash Preventability Determination Program to prevent accidents. In addition, evaluating the effectiveness of the Pre-Employment Screening Program can help improve driver safety in the long term.
Insurance Cost and Availability
In recent years, there has been a drastic increase in insurance costs for commercial fleets in the trucking industry. The annual operational Costs of Trucking report found insurance costs per mile increased by 18.3% over a period of five years, impacting the sustainability of smaller fleets and the longevity of trucking businesses.
The Applications of Telematics
To boost the productivity of the trucking industry, telematics plays an integral role. Despite the recent slump of commercial vehicle sales amidst the global recession, connected truck telematics is expected to grow by 10%, projected to be valued at roughly $17.1 billion by 2025 in an article by Forbes.
This expansion can be attributed to the ability of telematics technology which can potentially reduce overtime by 10-15%, save 20-25% on fuel costs, and reduce 20-30 minutes of daily driving time per fleet. While the installation of telematics technology might be initially costly for smaller fleets, its benefits as a whole are undeniable.
When it comes to higher revenues and increased profitability, telematics can help fleets in terms of reducing fuel use, saving on labor expenses, and improving overall vehicle safety and efficiency. Internet access in trucks along with driver health monitoring services are two key areas commercial truck owners should consider.
The Rise of Electric Vehicles
To address the growing issue of carbon emissions, the electrification of trucks is seeing an increase as battery costs are dropping. Although it is relatively slower to impact the commercial trucking industry compared to smaller vehicles like cars, electric trucks are now growing in popularity.
Recent reports from Bloomberg New Energy Finance indicate that the price of batteries is on track to cost only $100 by 2023–2024. This has led to the growth of smaller electronic vehicles in 2019, but installing electric batteries in long-distance trucking is still cost-prohibitive at the moment.
Long-range trucks require approximately $160,000 worth of battery for 800 km of travel, making vehicles heavy and reducing the amount of maximum payload. However, several brands including Volvo, the Chinese company BYD, Daimler, MAN, and Paccar DAF are testing electric trucks and producing higher volumes.
The Prioritization of Health and Safety
A recent study by Lemke et. al has explored the potential implications of the COVID pandemic on long-haul truck drivers across the United States. Due to the fact that they travel significant distances and interact with many people in the supply chain, they are more vulnerable to contracting illnesses that can negatively impact their health and performance.
The researchers concluded that the endemic health issues of long-haul commercial truck drivers put them at greater risk, especially as social distancing policies start to relax and the economy reopens. To address this issue, greater attention needs to be paid to national policies that can help protect drivers and other vulnerable workers in the trucking industry.
In addition, the revival of the trucking industry means that the parking shortage across the United States is still a major issue that many truck drivers face. There are still 37 states that suffer from a lack of parking, which means that governments and organizations need to increase funding to allow drivers to park their trucks and rest as needed.
The Shift in Operations
With the events of the pandemic, consumers have been relying more on e-commerce, increasing the number of deliveries while physical stores remain closed. Even though many retailers have already reopened, analysts predict that more consumers will start to rely on e-commerce due to convenience, impacting the trucking supply chain.
This means that the expectation for last-mile deliveries will remain higher compared to pre-crisis levels, increasing sales of vehicles like delivery vans. Compared to tractors and trailers, many companies are investing in last-mile delivery assets, which tend to be much smaller in size.
Some sources also predict that the pay for commercial truck drivers will rise in 2021 as companies face greater pressure to keep drivers satisfied in their roles. Due to the impact of social media and news outlets, professional drivers are also becoming more appreciated by the public, especially when it comes to effective supply chains.
The Impact of Automation
In many industries, the fear of automated technology taking over the jobs of human workers remains constant as advancements continue to be made. However, an article from Harvard Business Review suggests that automation is far from making the jobs of truckers obsolete. While AI, robotics, and machine learning have numerous applications, they are still limited.
Firstly, the role of commercial truck drivers extends much further beyond the act of driving a truck. They need to double-check their vehicles on a regular basis, secure their cargo, maintain their logbooks, and provide top-notch customer service. Many of these jobs are still too complicated to be fully automated, such as the loading and unloading of trucks.
On the other hand, automation is playing an increasingly major role when it comes to long-haul trucking to improve driver safety across further distances. Researchers note that as this technology becomes more sophisticated and reliable, it is estimated that there will be job losses for about 450,000 commercial truck drivers at some point in the future.
The Future of Commercial Truck Insurance
With the rising costs of commercial truck insurance being cited as a factor behind multiple trucking fleets going out of business, it’s more crucial than ever for companies to explore affordable insurance options. Due to the wide range of insurance plans available on the market today, it can be confusing for newer companies to make the right choice.
In addition to investing in a comprehensive insurance policy to safeguard the business interests of a commercial trucking company, stricter rules and regulations should be put into place to raise driver hiring standards. With the increase in trucking accidents over recent years, the defense of accidents has also become a greater challenge for lawyers.
Other factors like distracted driving can cost roughly $360,000 worth of injuries on an annual basis, negatively impacting the reputation of trucking companies while raising the cost of insurance premiums. As a result, keeping these many challenges in mind can promote the sustainability of commercial trucking and protect both business owners and their employees.
At the end of the day, reports suggest that commercial trucks are making progress when it comes to using cleaner fuel and electric energy. However, many obstacles remain in the way of the trucking industry embracing sustainability, including cost-related factors further exacerbated by the impacts of the global pandemic.
Comment below if you have any insights to add regarding the sustainability of the commercial trucking industry!