As 2011 quickly comes to an end, experts are providing their knowledge and input on what challenges the trucking industry can expect to undergo in the New Year.
Among these is the high price of diesel. Although the national average of diesel has dropped 6.6 cents to $3.82/gallon, the lowest we have seen since Oct. 24th, prices have risen as high as $4.12 last May. As the Department of Energy forecasts, “diesel fuel will average $3.73 per gallon in 2012,” which although is lower than we are currently experiencing, is still 25% higher than 2010 averages (http://www.dcvelocity.com/articles/20111219top_10_logistics_challenges_for_2012/).
Along with higher diesel prices comes rising truck rates. According to Transport Capital Partners, LLC’s fourth quarter business expectations survey, 70% of carriers expect to raise their rates over the next year, while half of those surveyed have already done so. Logistics Management explains that most major LTL carriers raised their rates this quarter by between 5.9 and 6.9 percent.
One of the reasons for higher rates is the current capacity shortage facing the industry. With issues including the rising costs of healthcare and equipment (which is up 20% this year), new safety restrictions such as CSA 2010 and the Federal Motor Carrier Safety Administration’s hours of service proposal, the lack of available credit, generation x drivers retiring, and rising fuel prices mentioned earlier, many trucking companies are keeping their fleets small due to the difficulty they are having qualifying for a loan and keeping up with surging costs, while others are being forced to close their doors for good and sell their assets. Learn more about the Perfect Storm for Capacity Shortage by clicking here.
On top of capacity issues, the economy poses another challenge to the industry, demonstrating a weak growth period. Unemployment rate fell to 8.6 percent last month, according to the Bureau of Labor Statistics, with trucking companies continuing to struggle with finding drivers to meet capacity issues. Drivers looking for a rewarding career can apply here.
Experts also predict challenges pertaining to truck regulations in 2012. In order to account for capacity shortages, The Safe & Efficient Transportation Act is encouraging raising the current 80,000 pound weight limit of trucks to 97,000 pounds. This, however, would only be acceptable on certain roads and only on trucks equipped with six axles instead of five, allowing the extra axle to account for the additional weight.
Among truck regulations includes a stronger effort to go green, decreasing gas emissions in order to achieve a cleaner, healthier environment, the way that Road Scholar Transport does with its new trucks, which give off 1/42 the amount of diesel particulate as the 2007 engines.
Finally, a stronger emphasis on security can also be expected in the New Year. As DC Velocity states, “the idea of guaranteeing that every package and every container is safe boggles the mind,” but that’s what Road Scholar Transport aims to do.
Road Scholar Transport applies security features which include electronic door monitoring, reefer and power unit tracking, Qualcomm distress/panic messaging, roof decals for aerial tracking, navalock, facility security, and much more.
As a member of CargoNet, a group dedicated to theft prevention and recovery, Road Scholar Transport is continuously pushing the performance envelope with new products and technologies to keep your freight safe.
What challenges do you feel the trucking industry will face in 2012? List your comments below.