Trucking continues to dominate as the primary means of transporting freight over any other mode in the United States. In the American Trucking Associations’ ATA American Trucking Trends 2013 report issued last week, trucking increased last year compared to 2011, accounting for 9.4 billion tons of freight (68.5% of all domestic shipments). With 6.9 million trucking-related employees, 2012’s trucking hit “$642.1 billion in gross freight-related revenues, or 80.7 percent of the nation’s freight bills.” 1
Bob Costello, ATA Chief Economist explains, “As the nation continues to travel the road to recovery following the Great Recession, it is becoming increasingly clear that trucking is leading the way.”
With shippers heavily relying on trucking to get their products delivered to customers on time, it may come as a surprise that only 2.8% of fleets contain over 20 trucks, with 90.5% of carriers operating six or under. 1 But increased costs spell trouble for small carriers.
“Smaller carriers can’t handle the increased costs of industry regulations and can’t hold their heads above water any longer,” spoke ATA Chairman Mike Card at the Great West Fleet Executive Conference held last week. “Trucking has been consolidated. The primary reason for consolidation in the trucking industry is the costs associated with increased regulation.” 2
Among these regulations Card is referring to include the following:
-Revisions to the hours-of-service, becoming effective July 1st, which include a restart provision containing two consecutive breaks between the hours of 1 a.m. and 5.am., reducing a driver’s work week from 82 to 70 hours, as well as a mandatory 30-minute break if 8 hours or less have passed since the driver’s last off-duty period.
-CSA, which is holding carriers and drivers more accountable, is limiting the number of unsafe drivers from the road, and thus, a carrier’s fleet.
-The mandatory use of electronic onboard recorders, which Federal Motor Carrier Safety Administration’s Anne Ferro believes will be proposed by September, would further dig into carrier’s pockets.
Other mandates Card referred to included “emissions standards, anti-lock brakes, fuel standards, and more.” 2
As Card explained, “It doesn’t matter how old you are. It matters how big you are. If you’re not big enough and profitable enough to handle the additional cost of regulation, you’re going to struggle to survive,” stating that carriers “basically have only three options for leaving the industry, ‘merger, sale or death.’” 2
In fact, Card posed the idea that one day the trucking industry will have consolidated so far that it could be left with only four or five carriers to choose from, like the airline industry, and that similarly, shipments will be booked online. 2
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An emphasis on the use of social media, education, uniformed drivers, and clean and safe equipment needs to be utilized to help remake the industry’s image, Card also noted. 2
For a copy of the ATA’s American Trucking Trends 2013 visit trucking.org.
Do you think that trucking will eventually consolidate to 4 or 5 carriers to choose from like Card poses?
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2http://www.ccjdigital.com/atas-card-costs-regulations-forcing-out-truckings-first-generation/
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