With the start of the new year, the commercial trucking and freight industry faces many obstacles. The trucker deficit continues to increase, and the high tariffs against China are projected to have great implications on exports in many parts of the U.S. However, despite growing concerns and harsh year-over-year comparisons, the Cass Freight Index report for January 2019 remains promising. Here is what you need to know about the Cass Freight Index report’s outlook for trucking in 2019.
What is the Cass Freight Index Report?
The Cass Freight Index report is a monthly publication released by Cass Information Systems. Since 1995, this report has been a highly trusted source of insight into the trucking industry and how it correlates with the wider economy.
The Cass Freight Index is often referenced by news sources and industry professionals. This report is also considered by many logistics executives and analysts to be the “most accurate barometer of freight volumes and market conditions.”
January’s Cass Freight Report Insights
When examining December and January’s data, the untrained eye may see a negative report. From January 2018, this year’s January report is down 0.3 percent. Additionally, January is down 1.2 percent compared to December 2018. Annually, December was also down by 0.8 percent.
January and December were the first two months in the last two years to reap negative numbers. However, the author of the Cass Freight Report, Donald Broughton, states that this is not a cause for concern. Because December 2017 and January 2018 were all time highs for shipment growth, a slight decrease this year simply means that freight flows are stabilizing.
Shipments May Continue to Lower
The author of January’s report also states that shipments may continue to show negative results through the coming months. Broughton explains that this may be the case due to the following factors:
- Increasingly difficult annual comparisons
- Transportation infrastructure at or near full capacity
- Low employment making it difficult to grow the active workforce
The Trucking Industry in 2019
Despite the negative numbers, Broughton ensures there is no need for alarm. In fact, the trucking industry is holding more promise in 2019 than previously expected. The report states that before January, many analysts and industry experts believed there was no way for 2019 to surpass the exponential growth seen in 2018. However, the outlook on 2019 has now changed. While many still don’t believe we will see comparative numbers to 2018 throughout the year, the report anticipates growth at an above-average pace will be seen.
Possible Storm Clouds
The report remains optimistic for 2019 growth. However, it also states that there are two “storm clouds” on the horizon that should not be ignored. When considering the freight industry in 2019, these two international issues should be considered:
Higher tariff threats with China
At the beginning of January, the U.S. had raised tariffs against China by 10 percent. Now, there is a threat of raising these tariffs to 25 percent in the coming months. China is the world’s second largest economy, and the increased tariffs could have real implications on the U.S.A.’s agriculture exports, along with other raw materials. If even higher tariffs are put in place, the freight industry could see a real decrease in volume.
The Decline of WTI Crude
In December, WTI Crude oil reached a low of $42.50 per barrel. This caused the oil to become less profitable, which in turn led to less incentive to drill for this oil. However, at the time of the report, WTI Crude was back up to $51 per barrel, which has led to some optimism on this front. However, there is still uncertainty about the future of crude fracking throughout 2019.
The U.S. is suffering a severe shortage of truck drivers. In fact, the industry is now facing a deficit of over 53,000 qualified truck drivers. Over the next decade, the shortage is projected to skyrocket to 898,000. Actions are being taken around every corner to combat this deficit. From recruiting more women to attempting to cater to the needs of millennials, freight companies and large businesses are looking for ways to get more qualified drivers behind the wheel.
However, if the shortage comes to an end, there will be other problems to face. From overcrowded truck stops to strict regulations on hours, there are some challenges the trucking industry needs to face now, so it can continue to grow. Here are a few of the issues the trucking industry must solve to expand smoothly in 2019.
Too Many Trucks on the Road
Gridlock traffic can make even short hauls take far longer than anticipated. Traffic means longer hours for truckers and more gas and labor expenses for freight owners. If that gap closes, that means there will be at least 53,000 more trucks on America’s highways. More trucks could potentially cause more traffic for everyday commuters as well as truckers. And with less truckers interested or willing to drive through the night, more are facing traffic and adding to the congestion. This will be a challenge the trucking industry will have to face if the gap is to close. Better routes, different hours, and altered expectations will have to be put into place to seamlessly add more trucks to the road.
Truck Parking Shortage
Finding a safe place to park your truck and take a rest is already an issue for truckers. Often, rest areas and truck stops are full to capacity, especially in the evening, leaving drivers to park on exit ramps. Some states allow this, but many places have laws against parking on ramps.
Legal or not, according to the president of Jet Express Trucking in Dayton and the former chairman of the American Trucking Associations, Kevin Burch, this is an accident waiting to happen. Especially when trucks park on off ramps from the highway, cars can come speeding around the corner and not see the truck in time. Burch believes that the government should be doing more to provide safe parking for long-haul truckers.
It is mandatory for truckers to take breaks after a certain number of hours, but when taking a rest is putting them at a higher risk than continuing to drive, something needs to change. This problem will only get worse as more truckers are introduced into the industry. More trucks on the road will mean even fewer safe areas to park.
As of now, freight owners are encouraging drivers to plan their driving hours, so they can find available places to park and rest when it is time. Where it is legal to park on the side of exit ramps, truckers are being encouraged to only park on ramps that enter the highway, as to avoid highway traffic.
Time Logging Issues
Finally, the trucking industry has introduced new logging technology that is causing some frustration. Originally, truckers would log their own hours by hand. Since the logging was all on pen and paper, truckers were often caught being dishonest about how many hours they had worked. In fact, log violations were the most frequent form of violation among truckers in 2017.
Due to the high volume of log violations, it became a federal rule in December 2017 that all large trucks be equipped with electronic logging devices. While many believe the electronic systems are a good idea, they do not allow for much flexibility for drivers. They only allow a driver to be on duty for a specific set of hours, require breaks after eight hours, and expect 10 hours of rest time for truckers with a berth.
Truckers would like to see more flexibility to give them the option to pull off the road in heavy traffic and make up the hours when there is less congestion. They would also like to cut the required rest time to eight hours and apply the other two to breaks throughout the shift.
Most rule makers in the trucking industry agree that the electronic logging systems need to stay. However, some are willing to consider modifying the strict rules. Having this issue sorted out in 2019 would allow for less pushback and more room for the industry to grow. It may inspire more people to become truckers, and it will also allow current truckers to work more efficiently and feel more in control of their days.
The transportation industry has plenty of room to grow and solving potential problems now will help make room for more truckers on the road.
No matter how much experience a driver has, harsh winter conditions can present a range of challenges on the road. From slick road surfaces to limited visibility, commercial truck drivers have to be ready for anything. Winters in the Northeast and Midwest are especially brutal, and almost always result in blizzards and multiple feet of snow on the ground. Even though February is half-way over, the cold temperatures and icy roads will still be here for a while. Thankfully, there are many things drivers can do to stay safe even in the worst winter months. Here are some things every trucker can do to keep themselves and other drivers safe this winter.
Pack for the Winter
Any trip in winter weather starts with preparation. Before ever starting your truck’s engine, make sure you have everything to stay warm and safe no matter what happens. Make sure you have the tools and supplies to keep your truck in shape including a flashlight, extra windshield washer fluid, chains, a bag of salt or sand, bungee cords, and a windshield scraper. For yourself, pack a reflective vest, blankets, a hat, a few pairs of waterproof gloves, a scarf, and thermal socks. You will also want boots with good traction and enough food and bottled water to last a full day.
Do a Circle Check
Before you hit the road, be sure to do a circle check and make sure everything is functioning properly. Ensure the wipers, lights, brakes, tail lights, washer fluid, and wiper motors are all in working order and ready for the trip. It is also important to make sure your mirrors and lights are clean and free from snow or ice while traveling. Keeping them clear will help you see what is around you and also allow you to be seen by other cars.
Keep Your Gas Tank Half Full
During severe winter conditions, getting stuck on the road is a real possibility. If you run out of gas and have to wait inside the cabin, you are putting yourself in a potentially dangerous situation. Be sure to keep your tank half-full at all times to avoid getting stranded in the snow.
Keep Your Distance from Other Vehicles
Highway traffic can often seem to travel in groups down the road. During harsh weather conditions, make sure you keep plenty of distance between you and the other vehicles. This can help everyone avoid an accident if a vehicle suddenly swerves or hits black ice. While it may be impossible to avoid other cars altogether, be especially careful to leave space between you and the truck in front of you. This will give you adequate time to break in necessary.
Use Good Judgement
Especially during the holidays, truck drivers are under huge pressure to get their shipments to their destinations. Even in the worst weather, truckers can be tempted to take the risk to make their deliveries on time. However, it is important to remember that no load is worth your life. Use good judgement and make the right call. If the snow is too dense or the highway is covered in black ice, do not take the risk. Park your truck and wait for the weather to blow over, even if it means your shipment will be late.
Practice Good Communication
Staying aware of weather forecasts and communicating with other drivers about upcoming storms or weather advisories is essential to staying safe on the road. PetroChoice’s Vice President of Human Resources Marilena Acevedo said, “Communication is key, and we keep an open line of communication with all of our drivers. When we are expecting a big storm, our leadership gets involved, and we may start a conversation a few days before to make sure we have a plan in place,” she said. “We do not want to be caught in the middle of an event without a plan. Planning is important to make it through a bad storm without too much trouble.”
Winter weather can be intimidating and certainly should not be taken lightly. However, with the right tools and preparation, you can stay safe and warm all winter long.
The trucking industry is vital for small towns and big cities all across the country. However, the environmental impact of so many big rigs on the road can deplete the earth’s resources over time. These same resources, like expensive diesel fuel, also cost fleet owners thousands of dollars every year. And with many countries setting goals to ban gas and diesel-powered vehicles in the near future, electric solutions must be made available to the long-haul trucking industry. This has created a race between trucking startups and well-known manufacturers to create the best electric semi-truck before the competition.
How Trucking Impacts the Environment
When it comes to environmentalism, semi-trucks often have a bad reputation. The stereotype of gas-guzzling trucks that produce endless dark smoke is well known. And while there may have been some truth to their reputation in the past, it is becoming less and less true.
The Environmental Defense Fund states that freight movement accounts for 16 percent of all corporate greenhouse gas emissions. This number, which also includes air and water-based transport, would have looked much different a few decades ago. Because of innovations already available, trucks are producing far less emissions than ever before. In fact, it would take 70 of today’s trucks to produce the amount of one truck from 2002.
Recent innovations have also led to trucks being more aerodynamic, which allows truckers to save thousands in gas every year. Simple tweaks to bumpers, side mirrors, tire technology, and truck skirts have led to less fuel consumption and a longer lifespan for trucks.
Even though trucks are running more efficiently than ever, there is another reason to look forward to electric trucks coming onto the market: Never worrying about fuel costs again. Diesel fuel, which was averaging at $3.50 per gallon in 2016, led to huge bills for fleet owners. A trucker traveling 120,000 miles in a year would result in a $50,000 to $60,000 spend in diesel fuel per year. That means two years of gas would cost the same as a new sleeper tractor trailer. Of course, diesel prices are less than they were in 2016, but the large investment in gas is ever-present in the trucking industry. However, with electric trucks, stopping to fill up on diesel would shift to plugging the trucks in for a quick charge, which has the potential to cut fueling costs in half.
These innovations in electric trucks are coming faster and faster to meet the needs of countries that have set goals to eliminate gas and diesel vehicles. For instance, the UK aims to ban all gas and diesels cars and trucks by 2040. That gives them only 21 years to create a power grid that can sustain the electric vehicles, as well as find solutions for the trucking and travel industries.
Here are a few trucking companies paving the way to electric semi-trucks.
Nikola Motor Company
Nikola Motor Co., an American trucking startup founded in 2014, has been working on fully electric-hydrogen powered semi-trucks. To date, they have created prototypes for three trucks, each designed for a different purpose and to meet the needs of specific regions. So far, Nikola has produced a sleeper available in North and South America, a day truck for the Americas, and a day truck specifically for Europe, Asia, and Australia. Nikola states that their trucks will sport 1,000 horsepower engines with a 500-1,000-mile range per charge. Additionally, drivers should expect a charging session to last only 20 minutes.
Nikola currently has $13 billion in pre-order reservations for its truck. And while an official release date has not been announced, the company is planning to feature demos of their trucks at the World Nikola event in Phoenix in April 2019.
Elon Musk’s company, Tesla, has been hard at work perfecting their electric semi-truck, the Tesla Semi, which was first revealed in November of 2017. According to Tesla, their semi, which comes with four motors, will be able to go from 0 to 60 mph in 5 seconds. They are said to have a 500-mile range on a single charge. And because most semi-truck hauls are under 250 miles, that means drivers can make an entire round trip without stopping to charge.
The Tesla Semi is scheduled to be released later in 2019, but it has already been pre-ordered by the hundreds by big-named brands. Some companies ready to embrace the new Tesla trucks include Albertsons, the parent company of Safeway, Shaw’s, Vons, Pavilion, as well as Walmart, Pepsi, FedEx, and dozens more.
The Rising Competition in Manufacturing
Nikola and Tesla are not the only two companies working to bring electric semi-trucks to highways everywhere. BMW and Daimler have both been working on their electric cars and semi-trucks. In fact, BMW is already using their electric semi for short distances at their headquarters in Germany.
Ford recently released a concept for its own electric semi-truck that they plan to call the F-Vision. Volvo has also released a concept for a completely cabless, autonomous electric semi, called Vera. As for these two concepts, no release date has been set.
The future looks bright for transportation. With so much innovation hitting the market, the trucking industry is evolving to be safer and more environmentally friendly every day.
The impact of the trucking shortage and how it can be fixed has been the primary topic of the trucking industry since the shortage began. To help fill more trucking positions, many trucking companies have upped the annual salaries they offer. In fact, a study published in 2018 revealed that the median salary for a truck driver has risen 15 percent since 2013. That is an increase of $45,000 to $53,000 per year. For a private fleet driver, the average salary has increased around 18 percent, which means these drivers are now taking home over $86,000 a year. However, even higher salaries are not enough to recruit the number of truckers needed to end the shortage.
Trucking Industry Must Meet Millennial Demands
As long-term truckers begin to retire, it is clear that the only hope of hiring enough drivers to sustain the industry is to meet the unique requirements of the millennial workforce. These workers, born between the 1981 and 1996 are not just after high-paying jobs. Instead, they are far more concerned with a job’s work-life balance potential. Work-life balance is so important to this new generation of workers, that it has surpassed compensation as the main factor a person considers when applying for a job.
In fact, a recent survey on the topic shows that 64 percent of workers said a work-life balance is the most important factor for job satisfaction, followed by job security (59 percent) and then compensation (54 percent.)
Creating a Healthy Work-Life Balance in the Trucking Industry
Trying to create an appealing work-life balance within the trucking industry can seem challenging. The long hours of driving, weeks away from home, and the not-so exotic locations along the highway can all be deterrents to the next generation of truck drivers.
Some industry experts ponder if requiring truckers to only drive regionally would be a valid solution to the problem. Instead of one trucker taking a haul across the country, truckers could trade off at designated stops, ensuring that every driver is able to make it home for dinner each night.
However, this solution may cause more harm than good. Alternating truckers and transferring loads between trucks would increase time and expenses for each haul. This difference in price could mean a jump in price on groceries and consumers goods as well.
How Drivers Can Improve Their Lives on the Road
While no work-life balance solution has been created, there are a variety of things truckers can do right now to improve their work-life balance. Here are a few things truckers can do every day to improve their quality of life on and off the road.
When driving down a seemingly endless highway for hours on end, it can be easy to zone out and go into autopilot mode. Keeping your mind stimulated is key to enjoying your travels instead of counting down the minutes until you arrive at your next stop. Luckily, there are plenty of audio-based ways to keep your mind engaged while you drive.
- Audiobooks: Audiobooks are a great way to catch up on the latest titles while you’re on the road. With the average book giving you up to 8-13 hours of audio, even just one audiobook can keep you entertained through a long night’s drive.
- Music: Listening to the radio can be a great way to stay engaged and entertained during a long trip. However, if the radio has too many commercials or plays the same songs over and over, there are a variety of better options out there. With new advancements like Satellite Radio and streaming services on your phone, you can start a station that only plays your favorite artists.
- Podcasts: Podcasts are another great way to stay entertained during long trips. Now, there are podcasts covering just about every topic from true crime, news, fishing, sports, and anything else you can imagine. Keep your mind engaged by getting hooked on a new story, laughing along with a comedy podcast, or learning new things about your industry or hobbies.
Trucking obviously requires a lot of sitting still. Sitting in one position for hours can take a toll on your neck, back and legs. However, taking periodic breaks to work out your muscles and burn some calories can help both your body and mind. Whether it involves stretching, going for a jog, doing some push-ups, or taking a long walk, find a small routine that works for you. Getting some exercise in also releases endorphins to help keep you happy and comfortable when you get back in the truck.
Work Hard and Play Hard
When you are finally home after a few days or weeks away, be sure to soak up all the time you have with your family or friends. It can be easy to get bogged down with a long list of chores that need to be done or errands you need to run. Those things are important, but if you don’t allow yourself to have some fun with your kids, enjoy your favorite homemade meals, or go on a date with your spouse, your entire time at home can seem like even more work. Remember what makes your job as a trucker worth it and be sure to give those things and people the time they deserve.
When you are back on the road, be sure to take a little bit of home with you. Take a picture of your family to put on your dash, and bring along some of your favorite homemade snacks for the road. Also, don’t forget to stay in contact with the ones you love. A daily phone call home can go a long way with keeping you connected to your family.
Having a healthy work-life balance as a trucker may be difficult at times, but it is not impossible with the right habits. In the future, commercial trucking companies will have to have more of an emphasis on balancing work and life to appeal to millennials.