The trucking services industry is a fascinating field right now. On the one hand, demand for trucking services has never been higher – thanks to fundamental shifts in the way consumers shop for and purchase merchandise.
On the other hand, we may be on the cusp of fundamental changes in the way trucking services are handled as a result.
Thanks to data compiled by the Thomas Index Report, we can see that sourcing activity for trucking services is growing at a substantially faster rate than its historical average – to the tune of ~10% higher demand above the norm.
There’s no question that a key reason for this demand growth is because of changes in how consumers shop – with much less reliance on brick-and-mortar retail and more emphasis on online purchasing.
According to freight exchange services provider DAT Solutions (aka Dial-a-Truck), for every 12 loads needed to be moved, just one truck was available during 2018.
That ratio is unsustainable over time. And it doesn’t help that there’s been a persistent shortage of long-haul truck drivers. That’s actually a 25-year trend, but it’s been becoming more acute with every passing year.
When Walmart finds that it needs to hire long-haul drivers whose all-in compensation approaches $85,000 annually, that’s when you know the fundamentals need to change.
And fundamental change is happening – even if you may not have seen it “up close and personal” yet. A group of manufacturers are working on developing self-driving (autonomous) semi-trailer trucks. Among the companies committed to this initiative are GM, Volvo, Daimler and Tesla.
Driverless trucks are already on the road, including ones developed by Waymo that began delivering freight for Google’s data centers last year. Amazon is hauling cargo via autonomous trucks produced by Embark, another self-driving truck developer.
The rapid pace of development means that it’s quite likely self-driving trucks will become mainstreamed during the 2020s. If that happens, we could then be looking at another set of issues – how to channel sidelined truckers into jobs in other fields.
Perhaps some of those people can find employment in several ancillary industry segments that are benefiting equally well because of shifts in how consumers shop and buy. Naturally, demand is robust and growing in the freight-related categories of crates, pallets and containers.
… On the other hand, it’s probably best if the displaced workers don’t try to get new jobs working at a shopping center …
2 thoughts on “Trucking services: Burgeoning demand hastens fundamental changes in the industry.”
The trade-off in our booming truck and package economy is to see so many retail shops empty and abandoned at ground level. San Francisco, where I live, is almost as rich as Luxembourg, yet many small stores are empty on our streets and never came back to life after the Great Recession.
Now we will see more delivery trucks on the road, slightly terrifying to behold without drivers, I’d think, when that becomes a dominant trend for the biggest semis. But one thing’s for sure: We might as well convert the shoe shop, the dry cleaner, the video store, the watch repair storefront and the newspaper kiosk into small apartments.
I am reminded that this degree of change is very American. The writer Ted Morgan, born Comte Sanche de Gramont in France, once pointed out that only in America does a child sent to the store come back empty-handed and say, “It must have been torn down!”
Nice post! Through some volunteer mentoring work at University of Delaware, I joined an NSF I-Corps research effort for a team focused on the trucking industry. We’re wrapping up that 6 week research sprint this week, in fact.
The challenges and technology evolution in this market are quite staggering!
With 3.5 million U.S. truck drivers (1 million long-haul) and about 5 million supporting jobs, the technology shift to autonomous vehicles and the eventual economic / jobs impact is scary to comprehend. (There’s a related podcast The Joe Rogan Experience with Andrew Yang that is worth viewing.)
In our research with direct interviews of over 100 people (from truckers to trucking company managers, safety tech companies, insurance companies, etc.), we were quite stunned with the degree of technology already in place or under test.
The long-haul trucker job is absolutely grueling. Weeks on the road is not uncommon before a night or two at home. Alone, driving 14 hours a day. If lucky, you get a truck-stop shower, a quick bite to eat and then sleep in the cab before repeating the next day. All of which is highly regulated with eLogs, and onboard camera systems monitoring your every move. So, IMO, they earn every penny they make!
(And, I can see why there’s a shortage.)
Despite popular misconception, most accidents involving truckers are root-caused by the everyday consumer driving their own vehicle (~70%). Issues of side swiping or cutting off truckers are rampant … and surprise, surprise, this has spiked in recent years with folks fiddling with their “smart” phones or other on-board gadgets in their cars. Nevertheless, truckers are typically blamed, with the industry becoming the new “medical malpractice” buffet of hungry attorneys … making the race to technology even more acute.
Our research has honed in on the challenges of driver isolation and fatigue, as these issues relate to driving performance and the increased risk of accidents. That is, until the robots take over!
I enjoy Nones Notes, and this topic landed squarely with a recent focus of mine.