The past six years have seen both the bottom of the Great Recession and economic recovery, the rise of GPS fleet tracking software; both a pile of new regulations and a slowing of the regulatory pipeline; both a dramatic increase in shipping and a shift of the industry towards short, local hauls. With so much change in the recent past, many companies are looking ahead, wondering what the next several years will bring.
One way to look at both the past and the future of the industry is through separate but related lenses: freight volume, or how much business the industry as a whole can get and changes in the costs and savings opportunities that individual carriers face.
Total freight volume took a huge hit during the Great Recession, but has now recovered. The economic projections are that total volume will continue to grow over the next five years and that the growth could be dramatic. Also, economics expect trucking to remain the dominant means of shipping freight in the foreseeable future. That is good news for everyone in the industry.
One reason for this good news is the return of manufacturing to the United States, since new factories need trucks to deliver parts and raw materials. At the same time, the increasing urbanization of the American population and the shift towards e-commerce and home delivery are rapidly changing the shape of U.S. shipping. Those carriers that can adapt to the new demands should do very well.
Costs and Savings
Most people in the industry dislike regulations, since they make business more complicated and, often, more expensive. This is true even when the regulations in question are clearly well-meaning and serve the greater good. For example, the tighter emissions standards that came out some years ago helped clean up the air (which is good for everybody in the industry, as we all must breathe), but at the same time dramatically increased the cost of new equipment. The first generation of compliant vehicles also had much poorer fuel economy, so they were more expensive to operate.
In recent years, fuel economy has improved again. For the latest generation of low-emissions trucks, the savings on fuel might actually balance out the high purchase price. This trend will continue, since the next group of emissions-related regulations concern carbon dioxide; excellent fuel economy is about to become the letter of the law. That means that the government and the industry will be working together to keep fuel costs down.
Carriers of all sizes stand to benefit substantially from new, more fuel-efficient trucks and an investment in GPS fleet tracking software that can help drive cost-savings and an overall smarter business