Office: (404) 975-4800

Jason Banner

Q&A: Trucking Expert Talks Inventory Shortage

What began as whispers of a potential vehicle shortage quickly became a leading source of concern for fleet owners and operators. This looming threat of operations being forced to shut down over inevitable repairs and mishaps or a lack of vehicles to move freight is troubling in these times of high demand. And with so much uncertainty regarding the issue, many in the industry are left with unanswered questions and concerns.

To answer the main questions surrounding the inventory shortage, we sat down with Charles Smith, Regional Business Development and Marketing Manager for Mission Financial Services. As an auto finance institution operating across the country, Mission Financial has provided Smith a unique opportunity to see behind the curtain on many of the industry’s pressing topics.

Exclusive Interview with Charles Smith

Q: What has been the most significant hardship for Mission Financial Services during the shortage, and how have you dealt with it?

A: The biggest hardship here at Mission Financial is the lack of applications being funded.

With the current situation, dealers just don’t have the inventory to meet the demand of the customer, which trickles down to financial institutions that are used to funding deals on a regular basis. One way we’ve dealt with this is to keep knocking on doors and letting my customers know that Mission Financial is still here for them.

Charles Smith, Mission Financial

Q: What has been the most considerable hardship for the dealers and/or others in the industry?

A: The biggest hardship for my dealers would be the lack of inventory. Now, the supply can’t keep with the demand. Not only is the trucking industry feeling the heat, but other industries are as well.

Q: Was COVID-19 the only cause of the vehicle shortage?

A: Yes, COVID-19 was the driving force of the shortage. When the pandemic hit China, the production of automotive microchips experienced a major decline, because that is where they are produced. Without these chips, manufacturers can’t produce new units, which is why we are where we are today. What we are currently experiencing is the result of a global domino effect.

Q: When and how do you think it will end?

A: Unfortunately, at the moment, I see no end in sight. According to recent market analysis, it may be another year before we can see some relief from this devastating virus. However, some of my dealers remain optimistic that we could feel some ease by the second quarter of 2022.

Q: Any advice for drivers, fleet owners, and other industry members?

A: To my drivers out there: keep your equipment well maintained so you can keep moving freight until you get the new rig you’ve probably already ordered. Plus, with spot rates at an all-time high, there’s a lot of money to be made out there. Just keep on truckin’ because we need you.

Related Content:

How to retain your top drivers during a shortage

Used truck prices continue to skyrocket

How to Keep Your Truck on the Road

The Importance of Semi-Truck Repair Loans

Recently, the trucking market has taken a nosedive due to the severe vehicle and parts shortage that has been wreaking havoc since 2020. With the current inventory not meeting industry demands, the market for these vehicles has become insanely competitive. In fact, in July of this year, Class 8 vehicles and other heavy-duty trucks sold rapidly while their prices spiked at a year-over-year rate. According to the ACT, unit sales went up by 26.6% compared to last year’s numbers and prices of Class 8 vehicles increased by at least $77,000. Unfortunately, due to the current state of the world, there’s no guarantee as to when inventory or prices will balance back out.

Those who already have a running rig have an advantage over the new drivers entering the buying and selling arena. However, if your truck breaks down and is in need of parts or a serious repair, you may find yourself in the same situation as green truckers. 

→ Everything You Need to Know about Annual Semi-Truck Maintenance

The truth about used truck repairs

On average, a single truck driver travels anywhere from 45,000 to 100,000 miles per year. And with working hours and delivery demands regularly increasing, it can be easy to forget about scheduling regular or preventive maintenance. However, for used trucks, care is crucial for keeping your rig on the road, especially amid the current inventory shortage.

It’s also important to prepare and plan for the inevitable repairs that come with owning a used or older truck. As an owner/operator, it’s vital to keep essential tools in your cab so you can solve common repairs on the fly and stay on schedule. 

The most common used truck repairs include:

If you want to be extra careful, be sure to prepare your vehicle for the various seasons and the weather conditions that come with them, like high temperatures in the summer and icy roadways in the winter.

→ 5 Most Common Truck Problems and Repairs

The impact of the vehicle shortage

As previously mentioned, since the start of the COVID-19 pandemic, automotive manufacturers and parts manufacturers have been battling a labor decline and production delays brought on by the effects of the coronavirus. These obstacles eventually caused a massive vehicle and parts shortage that still affects dealers and consumers globally. Once cases declined and businesses began reopening, manufacturers assumed they’d be able to ramp up production and compensate for the lack of product. However, they did not anticipate their suppliers being hit by a wave of various natural disasters, further causing more closures and setbacks. Dealers saw no end in sight and began offering extreme incentives and personalized financing plans to move stagnant inventory, not realizing they’d be left with virtually nothing in the way of new and used stock. This move ultimately solidified the shortage that companies and consumers are still battling to this day.

Unfortunately, this shortage has had a significant effect on the trucking industry. Newer truck production is still moving at a snail’s pace due to a large raw materials shortage, and truck dealers are experiencing drops in sales of up to 0.6% month-over-month. Under these circumstances, drivers could sell their used rigs and receive top-dollar, but it would be unwise if they plan on using that money to buy a new or used truck, seeing as how neither really exists at the moment. Shippers are also continuing to pay higher premiums for transportation due to the disruptions in the supply chains. The DAT suggests that spot and contract rates are higher than they’ve ever been while freight volumes decreased by about 8%. To top it all off, drivers are experiencing port congestion, unloading delays, a tighter intermodal capacity, and more freight than the commercial trucking industry can handle, especially as the holidays move in.

→ Where Did All of the Trucks Go?

How semi-truck repair loans can help

As a truck driver, your vehicle is your lifeline. When it breaks down or needs parts and repairs, your income and livelihood are on the line. And if the repairs or parts required aren’t within your budget, you could be facing quite the predicament. Fortunately, companies like Mission Financial Services can help by offering specialized commercial vehicle repair loans. These loans assist in covering the cost of repairs and help get your rig back on the road. 

With older or used vehicles, you’re more likely to face frequent, costly repairs than newer trucks, especially if you’re operating at a higher capacity. That’s why it’s crucial to have a personalized repair loan at the ready to protect your investments and income. 

For added protection, companies like Mission Financial Services offer a multitude of specialized loans and financing offers, including:

  • Repair loans
  • Commercial vehicle title loans
  • Personal loans
  • And refinancing options

→ What are your options to cover the cost of semi-truck repairs?

Why wait?

To obtain a commercial vehicle repair loan, you will need to complete and submit three online forms, including a credit application, vehicle spec sheet, and sales order. You will provide your contact information, your past and present employer, income specificities, and any previous financing information for your credit application. The vehicle spec sheet will require information like make, model, vehicle I.D. number, and mileage so you can obtain the best loan that fits your exact needs. The sales order will show the sales price of your commercial vehicle as well as its taxes and fees.

APPLY NOW

Top 10 Truck Driving Jobs

Take a moment and think, what is one industry that has been behind the success of every other business in the world? That’s right, the trucking industry. 

There’s no denying that the profession of trucking has and continues to be one of the largest contributors to the American economy. Without it, millions of hardworking individuals would be without a job, and other businesses, like Amazon and Walmart, would collapse due to limited resources and the inability to ship. Different vital industries like construction, oil and gas, and automotive would also suffer greatly without trucking. And without the success of these enterprises, America’s economic infrastructure would ultimately give way. 

-> What Would Our World Be Like Without Truck Drivers?

So you see, truck drivers indeed are the backbone of our society, the oil that keeps the machine running smoothly, if you will. Fortunately, the essential occupation doesn’t seem to be going anywhere, making it one of the most secure jobs in the world. The only thing left to do is pick the type of driver you would like to be. No pressure.

What are the Different Types of Truck Drivers?

Flatbed Truckers 

Built differently than traditional tractor-trailers, flatbed trucks typically require additional training or education to execute safe and effective operations. On top of that, their drivers must thoroughly understand what they will be hauling and how to secure it properly since flatbed loads must be secured differently from tractor-trailer cargo. Typical freight includes vehicles, military vehicles, oversized freight, and oddly shaped cargo that doesn’t fit well on other truck types. Fortunately, since flatbed trucking is more demanding, it typically offers higher pay than different driving positions.

Dry Van Truckers 

Dry van trucking is an excellent position for those entering the occupation with minimal experience. These drivers are typically responsible for single trailer rigs that contain items like non-perishables and dry goods. A bonus for this title is that drivers are often not accountable for unloading upon arrival.

-> Buying vs. Leasing a Semi-Truck: An Owner Operator’s Guide

Tankers 

If dry goods aren’t your thing, you may be interested in becoming a tanker. Tankers primarily transport a variety of liquids, including gasoline, chemicals, and even milk. However, there are times that tankers will also be responsible for hauling dry products like cement or sugar. But in some cases, these drivers could also be dealing with highly explosive chemicals and gases. Since moving this delicate cargo can be, in some ways, dangerous, special training is required before starting this job.

Freight Hauler 

Otherwise known as commercial truckers, freight haulers specialize in moving cargo that does not fit into a specified category like reefers and tankers. These drivers need to be flexible and good with change.

-> Post-Pandemic Era for the Freight Industry?

Refrigerated Freight (Reefer Drivers) 

Refrigerated freight truckers have a pretty strenuous position. They are responsible for hauling loads that need to be kept at specific temperatures, like food, meats, highly perishable goods, medical products, and body products. That all being said, it’s crucial that reefer drivers know how to regulate the trucks’ temperatures, monitor for fluctuations, and adequately store freight for best refrigeration and temperature stability. Like flatbed drivers, reefers are often paid more than other types of drivers due to the amount of responsibility they are charged with.

Local, Regional, and OTR Drivers 

Local, regional, and OTR drivers are labeled or defined by the mileage they acquire. While local drivers only haul within a city, regional drivers often move freight throughout an entire state or metropolitan area. For OTR drivers, they have the potential to be given routes across the United States.

-> Why Owner/Operators Should Run Hard This Holiday Season

Auto Haulers / Car Haulers 

Auto haulers, are given special trailers that can hold an abundance of various automobiles. Where they are taking these automobiles varies. Drivers may be transporting from auctions, local vehicle lots, or ports; you name it. With tens of thousands of dollars on the line, you better believe this job comes with a more than fair wage.

Hazardous Materials Drivers 

The typical hazardous materials driver will haul fuel, compressed gas, chemicals, waste, and other flammable/combustible materials. It’s crucial for drivers to be knowledgeable about the contents they’re hauling and how to handle them safely in the event of an emergency. To ensure everyone’s safety, special training, certifications, and/or permits will be required.

-> 5 Things Owner/Operators Should Do to Achieve Success

LTL Freight Truckers

 LTL, or Less Than Truckload, drivers move smaller freight and don’t need to go as far as standard shipments. With their cargo being on the smaller side, they will typically have multiple stops to make in one day and are generally responsible for unloading their own freight.

Low Boy 

The trailers that sit close to the pavement and the truckers who drive them are low boys. These rigs sit lower to accommodate taller equipment or cargo and provide stability with a lower center of gravity. In most cases, these trailers are hauling overly large freight, like manufactured homes, construction equipment, etc. However, these low boys don’t fly solo. They often are escorted by vehicles with flashing lights and signs that read something like ‘Caution’ or ‘Oversized Load.’

Which Type of Truck Driver Should I Choose? 

It’s clear that trucking is not only a high-demand profession, but it is a career that offers flexibility, the opportunity to travel, and the chance to meet and develop camaraderie with fellow drivers. Regardless of your age, gender, or educational background, your chances of achieving success are just as probable as the next. Best of all, the variety of job titles allows you to choose an occupation that best suits your life.  

Before deciding, you’ll want to consider personal factors such as your location, risk tolerance, situation, and experience. For example, if you’re new to the industry, you won’t want to dive headfirst into something like transporting hazardous materials.  There is a great likelihood that you will hold multiple positions with various skill requirements throughout your career. So, use this list as a guide to discover where to start or where to go next. 

Want to know how much truck drivers make? Download our infographic!

DOWNLOAD

How to Save on Diesel Emissions Repair Costs

In 2005, diesel engine manufacturers weren’t entirely sure how to attain the EPA’s future emissions regulations and standards. Ultimately, they were faced with having to think on their feet and start inventing new parts and systems if they planned on staying in business. 

Not surprisingly, the industry delivered. The invention of SCR systems used fluid formulas to scrub nitrous oxides out of the diesel exhaust smoke chemically. This led to cleaner air and gave a much-needed boost to big rigs’ fuel economy. Experts say aftertreatment systems reduced harmful emissions by up to 90% for hydrocarbon and carbon dioxide and up to 50% in particulate matter.

While trucking companies and engine manufacturers feel the systems have proven safe and reliable, many aren’t fans of the amount of maintenance requirements to keep them functioning correctly. 

→ Top ways to prepare for roadside inspections 

The reality of diesel emissions maintenance

Many don’t realize that before implementing the aftertreatment systems, private long-haul fleets were averaging around $1,200 per month on exhaust system maintenance, such as replacing a rusted or cracked pipe or fixing a turbo failure. Once the SCR systems were installed, companies were hit with an average of $27,000 per month in repairs. This 1,837% increase in expenses left fleet owners at a loss for words. We know what you’re thinking—how does any amount of maintenance add up to almost $30K per month? For optimal performance, today’s diesel emissions systems require EGR coolers and valves, diesel particulate filters, DEF dosing systems, and several sensors to work together in perfect harmony. If one item malfunctions or needs repair, the system will fail and force the heavy-duty rig and its driver to cease all operations, leaving the fleet owner with a severe financial burden.

→ Tips for tire maintenance and repair 

The actual cost of diesel emissions repairs

In 2017, the American Trucking Associations’ Technology & Maintenance Council began monitoring various repairs and the costs associated with them to help fleets analyze how their fleets’ performance could be improved and, in turn, limit expenses. When data was first collected, exhaust system repairs were approximately $513; a year later, they increased by 27%, putting them at $405 per repair. Today, the costs are still rising as new technology, parts, and companies emerge. 

Understandably, fleet owners and operators are tired of these looming and ever-increasing prices. However, the TMC found that these repairs wouldn’t be necessary with a bit of forethought.

Heavy-duty emissions maintenance tips

To combat costs and constant repairs, fleets have decided to operate outside of the aftertreatment system manufacturer’s recommendations. While the suggested intervals for repair and maintenance are fair in ideal scenarios, companies have quickly realized that it’s more effective to operate based on actual variables. These variables include truck usage, geography, fuel quality and consumption, weather conditions, applications, and more. After seeing how all these factors played a role in SCR system repairs, it became clear that investments in in-house equipment and technicians were necessary. 

Another way to limit expenses is to perform routine cleanings, checks, and maintenance every 100,000 miles instead of the OEMs’ recommended 400,000 miles. Companies have also started looking at other vehicle functions to determine if they may be behind emission failures. For example, a simple fluid leak could be the cause of a reoccurring problem versus a malfunctioning sensor. 

All of these preemptive measures will undoubtedly reduce costs and downtime, allowing more money to be available for improving your fleet.


→ 5 common truck problems and their repairs

How to Retain Your Top Drivers During a Shortage

This past year came with several challenges and transformed the shipping industry in more ways than one. Since July, truckload rates are up 40-50% and rising due to retailers’ attempts to restock their inventory to meet the heightened demand. With these businesses reopening and the need for shipping at an all-time high, now is the perfect time for truckers to find multiple offers for work.

However, despite the wealth of opportunities for drivers, many companies are experiencing high turnover rates. Not only that, but the industry is facing a driver shortage that many professionals feared at the start of the pandemic. While these scenarios don’t seem ideal for operators, there are ways to ensure driver retention. Here are some best practices for retaining your best drivers. 

→ Finding the fix for the national driver shortage 

1. Invest in your drivers.

In most industries, having the best equipment and supplies is essential to running a successful business and retaining employees. Inadequate equipment and low maintenance are significant reasons why many truckers are abandoning their fleets and employers. 

It’s proven that when companies provide new equipment and proper maintenance, drivers can work more and, in turn, earn more money. If your goal is to keep your employees on and happy, you may want to consider investing in them and the tools they need to succeed. 

The top investments to make include:

  • Newer truck models. 
  • Comfortable seating.
  • Auxiliary power units (APUs).

2. Set clear communication standards.

Many would agree that establishing communication standards is key to having a healthy work environment and a functioning team. In the trucking industry, clear and concise communication is invaluable. To improve retention and team-building, opt for two-way communication with direct channels and consider instilling committees to handle any feedback or peer input to allow for internal cohesion. Over time, you will see improved efficiency and excellent communication skills.

→ Employment Challenges Facing the Trucking Industry 

3. Offer competitive pay.

Possibly the most obvious way to retain your drivers is through competitive pay. Many owners and operators found pay to be the single factor that drives retention downward. Try offering pay based on a guaranteed minimum mile per week versus the non-reliable high pay per mile. A set mileage will provide your drivers with more stability and keep them happy and willing to do their job. You should also consider offering health insurance packages and/or retirement plans, depending on the size of your fleet. The more you can contribute financially; the more inclined your drivers are to maintain their loyalty.

4. Prioritize health.

Approximately 50% of drivers consider their health one of their top three concerns when considering joining a new fleet. That being said, it’s essential to promote good health by equipping all trucks with functional exercise equipment, offering wellness programs that encourage healthy eating habits and an active lifestyle, and scheduling free health screenings for all drivers. These screenings will ensure optimal health and act as preventative care that keeps your drivers on the road and out of the doctor’s office.

→ Staying Healthy on the Road

5. Set realistic expectations.

When it comes to any job, transparency and clear expectations are a must; this standard does not change in the transportation industry. Within the first 90 days of employment, drivers will be able to tell if a job is genuinely how it was described, meaning misrepresented positions could lead to higher turnover rates. To avoid this, be upfront with new drivers about the number of miles they can anticipate, compensation, and company culture. 

Another way to ensure retention is by instructing recruiters to provide accurate information when finding fleet operators. Instead of paying your recruiters on a “per hire” basis, offer a flat salary to encourage finding the best candidates instead of collecting drivers like bounties.

6. Support your employees.

Lastly, be sure to reward your drivers’ performances. Offering support and encouragement may seem fickle, but it can be the difference between a semi-operational and fully operational fleet. Experts have gathered that a 10% raise could cure the current driver shortage, although many drivers say that a simple show of appreciation could hold the same power as a raise or promotion.

It’s true, a supportive company culture can lead to excellence through and through. Instruct your fleet managers to monitor your drivers’ key performance indicators or KPIs and their performance through data-driven observations, such as positive customer reviews. You should also consider implementing safe driver programs that reward your fleet operators for minimal idling and safe driving practices.

Archives

Sign Me Up!

Stay up to date with the latest news in the commercial trucking industry.

Contact Us
close slider