Driver shortages, fuel prices, better compensation and increased range often top the list of concerns in the trucking industry. What few are talking about is the economy and how it is affecting the industry.
The effects
In the US, 72.6 percent of all goods and products are moved by truck at some point. As prices rise, people spend less money and buy fewer goods. A decrease in demand for everything from food to furniture means more competition for available transportation jobs.
Inflation is also costing businesses and the self-employed more in maintenance, insurance premiums and interest rates. Operating costs topped $2.25 per mile by 2022, the first time they have risen above $2.
Shippers are looking for ways to minimize costs
A tractor-trailer designed to haul equipment and heavy machinery will not get the same mileage as a truck hauling groceries. Various shipping fees may be passed on to the consumer, but often fail to cover the overall cost. At the same time, shippers are trying a variety of measures to reduce their costs. One way to control costs is to load more than the average or double the containers so that it counts as a single load instead of 2.
Speed and accident potential
Delivering cargo quickly, efficiently and safely has always been the hallmark of the industry. It is even more important in today’s economy and the increased competition for jobs. Larger loads increase the chance of an accident. The average motorist has no idea how long it takes to stop a tractor-trailer and often engages in dangerous behavior. Contractors may delay purchasing new tires or experience braking problems because they simply cannot afford the cost of repair or replacement.
There is no solution in sight
It’s a vicious circle that has no clear solution. Retailers raised prices to make up for lost revenue during the pandemic, prompting a shift in the most in-demand products. The Fed raised interest rates in an effort to curb inflation.
Oil producers cut production, creating a deficit that drove up fuel costs. Heavy haulers are part of this cycle. They have no choice but to raise their own prices and pass the costs on to customers. It’s a cycle that seems to continue unabated for the foreseeable future.
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