Early this year, analysts predicted a slowdown in the $800 billion trucking industry. Unfortunately, things have turned out even worse than originally predicted — 2019 has found the U.S. in the midst of a freight recession, with significant difficulties in the trucking industry.
Is there hope for recovery? In this blog post, we’ll explore the future of trucking.
What’s happening in the trucking industry?
The trucking industry is notoriously cyclical, fluctuating along with demand for shipping at particular times of year, and contingent upon the overall economic climate. Bad weather and tariff threats have both contributed to the industry’s recent nosedive.
Severe weather
Severe weather delays cost the freight industry an estimated $3.5 billion annually, and the weather has been particularly extreme this year.
A polar vortex slammed the Midwest and Northeast in January, a record-breaking cluster of tornadoes devastated much of the same area in May, and the Mississippi Delta is still struggling to recover from massive flooding that began in February.
These and other severe weather events have had a devastating effect on infrastructure and resulted in delayed and canceled shipments.
Tariffs
The industry was on unstable ground, particularly in the first half of the year, in part due to tariffs on Chinese goods (and the potential for additional, even harsher tariffs). A number of trucking companies have filed for bankruptcy this year, and many others have fallen short of revenue and profit expectations. Some cite the tariffs as a contributing factor.
What does the future hold?
Despite significant changes this year, experts say the industry may stabilize by 2020. So what are the factors that will drive growth in the future?
Electric vehicles
As consumers increasingly demand sustainability, the shipping industry is looking for more sustainable transport methods, and truck makers are exploring options for clean-air vehicles.
Tesla is working on an electric semi-truck, and big corporations like Walmart and UPS have already placed pre-orders. Tesla proposes that the new semis will save owners money after two years of ownership because they require far less fuel and maintenance than diesel trucks.
Driverless technology
Truck makers are also developing automated driving technology, despite strict regulations. McKinsey & Company suggests that a fully automated trucking industry would reduce operating costs by about 45%.
The currently available technology has its limits, so drivers will still need to perform certain tasks and work in tandem with the automated systems.
Predictive analytics
Trucking companies are using big data and predictive analytics to streamline their operations and increase safety and productivity. Here are just a few of the things trucking companies can track with predictive analytics:
- Truck health reports
- Weather events and road closures (and subsequent delays)
- Fuel efficiency
- Real-time location updates
- Safe driving behaviors
Using computer-camera devices, service logs, remote diagnostics systems, and more, companies can collect data, view real-time insights, and track metrics over time.
Conclusion
Despite a rough start in 2019, the future of trucking is bright — and relies heavily on technology. As the industry continues to change, trucking companies will need to change, too. Teaming up with an experienced logistics partner can help.
GlobeCon is a software-enabled transportation logistics partner, with over 25 years of experience providing drayage, warehousing, transloading, retail distribution, fulfillment, freight forwarding, and nationwide trucking support services.