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.
Prices on consumer goods are on the rise for a variety of reasons. From new tariffs against China upping prices on technology, tires and other imported items, to inflation, there are many reasons we may be seeing higher prices on the things we buy every day. But could the trucking shortage also be a contributing factor? Especially when it comes to the rising prices of groceries, there is reason to believe the deficit of truckers could be directly related.
Grocery Prices on the Rise
According to the U.S. Department of Agriculture, food prices will increase by 1-2 percent in 2019. This was a common trend for many decades; however, the rise of food prices has slowed over the past few years. Now, these prices are back on the rise, with notably higher prices on groceries of all kinds.
The price of dairy products is projected to increase by 3-4 percent, vegetable costs will rise 2.5-3.5 percent, and both bakery and fruit prices will increase by 2-3 percent. As for meat, all costs are expected to rise by from 1-3 percent, with the exception of pork, which could actually drop in price by .75 percent.
What is Causing this Raise in Prices?
The rise is grocery prices could be due to a number of factors. From oil prices to overseas trade, a variety of things can spark a cost increase at the grocery store.
High Oil Prices
Oil prices can affect grocery store prices in two different ways. High oil prices often lead to increased shipping costs, which results in higher grocery prices. Because of the higher oil prices, food that gets transported across long distances costs more to ship, so grocery stores have to charge their customers more. Oil prices are constantly in flux and are influenced by several complex factors of their own.
Oil can also affect farming, which can make groceries more expensive as a result. Oil byproducts are an important part of fertilizers, and their price accounts for 20 percent of the cost of growing grains.
Climate change can cause extreme weather conditions that harm crops or make them much more difficult to grow. Because of greenhouse gas emissions, the hot air can absorb moisture and cause it to rain less, drying up ponds and lakes. Additionally, when it does finally rain, the water runs off the land and doesn’t get absorbed by the crops. These factors force farmers to invest more money into yielding a smaller number of crops and selling them to market at a higher price.
U.S. Government Subsidies
Because it is used to create ethanol, a large percentage of the U.S.’s corn production is subsidized. Currently, 40 percent of corn crops go to producing ethanol, which is a huge increase from 2000’s six percent. This means less corn is going to the food supply each year, causing the prices at the grocery store to rise.
World Trade Organization
The World Trade Organization also has a say in the world’s corn and wheat stockpiles. Because many developed countries like the U.S. and countries in the EU subsidize their agricultural production, they have an advantage over poorer, developing countries. To compensate, the World Trade Organization limits the amount of stockpiling a country may do. However, this means that in a shortage, prices of corn or wheat could rise dramatically in the U.S.
How Does the Truck Driver Shortage Contribute?
In recent announcements, brands including Mondelez, Hershey, Nestle, Unilever, and Coca-Cola stated they will need to increase prices in 2019. These price hikes are in reference to two factors: Higher ingredient costs and increased freight expenses.
A detailed analysis revealed that the cost of a refrigerated truck moving from Washington State to New York rose by 18 percent in only a few weeks. So, a shipment that costed $8,450 jumped to $10,000 a few weeks later. In addition, a truckload heading east out of California saw prices rise by 25 percent during the same time period.
So, what does this have to do with the trucking shortage? Because there are less truckers on the road, the demand for qualified drivers is boosting prices across the board. The cost to transport food across the country has risen, and those higher prices are reflected in markets and grocery stores as well.
American Trucking Associations says the industry is lacking at least 50,000 drivers. If the trucking shortage continues on its current path, that number will be at 174,000 by 2026. And in a decade, it could take 890,000 new drivers to adequately close the gap. Now more than ever, trucking companies are on the lookout for new, qualified drivers to help keep grocery prices low and the economy healthy.
Millennials are now the largest demographic segment of the workforce. This generation, which consists of those born from 1981-1996, is primarily defined as the first generation to grow up with access to modern technology, particularly the internet. This, along with other factors, has caused them to have different requirements, expectations and desires as they search for jobs. And with booming industries like tech and engineering tempting millennials with large salaries and room for growth, many have never considered a career in commercial truck driving.
However, with the trucking shortage leaving many driving jobs unfilled each year, companies are willing to make truck driving worth a job hunter’s time. Here are a few reasons why millennials should consider becoming truck drivers.
Stereotypes are Changing
The truck driving industry has a lingering reputation of only being suitable for brawny men with long beards who practically live in their trucks. However, this stereotype is long overdue for a makeover. The days of heavy lifting and hard to maneuver big-rigs are in the past. You don’t need extra muscle to be a truck driver, which is one reason why trucking is now a career enjoyed by women all over the country. Trucks now have more luxurious cabs with power steering, state-of-the-art technology, and everything from hood releases to dollies are now hydraulic. Everything works with the push of a button, which means the world of trucking is more accessible than ever before.
Because more and more women are becoming truck drivers, new safety priorities are being established, which are changing the way trucks are designed and the trucking culture as a whole. Trucks can now come with their own private bathroom units and security systems, and truck stops are no longer exclusively full of male truckers.
The Trucking Demand Means Competitive Wages
According to Jon Gilbert of PLG Consulting, “The average age of commercial truck drivers is 55 and rising rapidly. The concern is that older, qualified truck drivers are retiring, and we are not getting adequate replacement drivers.”
As the age of truckers rises, more and more trucking jobs are becoming available. This increased need for truckers is only making starting salaries increase as well. In 2017, the average starting wage for a trucker was around $40,000 per year. Truckers are also typically offered excellent benefits including 401Ks and healthcare. And while $40,000 may be the starting salary, there is plenty of growth in the industry. Some truckers even make upwards of $80,000 based on experience and mileage.
Advancements in Autonomous Vehicles
While many people have feared that autonomous vehicles may cause truckers to lose their jobs, the opposite is actually the case. In fact, advancement in AI in the trucking industry would only make truckers’ lives easier by solving any problems they may currently be facing.
Autonomous vehicles will still require drivers to be alert and present in the vehicle at all times. However, with advancements such as platooning, which links trucks together via WIFI to reduce fuel consumption and accidents, drivers would not have to be as active in controlling the vehicle. This would allow drivers to not become mentally exhausted after long hours behind the wheel, and most importantly, it would mean their jobs were safer.
Truck Driving Requires Minimal Requirements
Unlike most jobs that have starting salaries around $40,000, commercial truck driving does not require an expensive college degree. To become a trucker, one only needs to complete an accredited training course. These trucking schools typically cost between $3,000 and $7,000, which is far less than a four year degree. Additionally, it does not take long to become a qualified driver. The average school will only take seven weeks to complete, meaning a new trucker can be out on the road within a few months of making a career change.
One concern the trucking industry faces when it tries to recruit young people right out of high school is current law against interstate travel. Currently, truckers must be at least 21 years old to travel over state lines. This means that people hoping to become truckers out of high school must only drive within their state for a few years before getting to take the higher paying, cross country trips.
However, lawmakers have recently started taking steps to reduce the interstate age to 18. This change is a direct response to the shortage of truckers. If this new law passes, many trucking companies, restaurants, and retailers believe it would put more truckers on the road and increase the efficiency of goods being delivered across the country.
Now is a great time to start a career in trucking. If you are considering becoming a commercial truck driver but need a first-time buyer loan, contact Mission Financial today.
Throughout 2018, the heated trade war between the U.S. and China has been full of twists and turns. The changes in taxes is an effort to boost the American economy by encouraging less outsourcing and bringing more manufacturing to the U.S. However, some new policies put into place earlier this year have caused difficulty for multiple industries. But what does this all mean for the trucking industry? Could the new tariffs mean less trade and an end to the demand for truckers across the U.S.? Here is what you need to know regarding the new tariffs against China.
Trade War with China
The trade war between China and the U.S. has been a roller coaster, especially throughout 2018. Not only has the U.S been levying tariffs on over $250 billion of imported goods out of China, but China is fighting back with $110 billion on the U.S.
Now, as 2018 comes to a close, the nation awaits the $267 billion in tariffs against China taking effect on Jan. 1. This round of tariffs is expected to hit far closer to home, as businesses of all sizes and industries, as well as consumers, feel a direct effect. Prices on consumer goods including tires, furniture and especially technology are expected to be the first to rise dramatically.
An Argument for Tariffs
Over time, those in favor of the tariffs are hoping the new taxes will boost the American economy. Because of the new tariffs, businesses will be able to charge higher prices for consumer goods. Additionally, domestic producers will profit more by investing in factories on U.S. soil. In theory, this will create millions of new jobs in the U.S. and improve the economy exponentially.
However, the higher taxes mean higher prices for the American people as well as businesses big and small. This could potentially cause the U.S. economy more harm than good, as business struggle to stay afloat while adjusting to the new costs.
New Tariffs Already Affecting the Automotive Industry
The industry in the U.S. already feeling the effects of tariffs includes the automotive industry, which is having to dig deep to afford the new taxes on vital materials like steel and aluminum. In fact, because of the rise of cost in imported goods, some American-based factories are considering taking their business overseas to avoid the taxes.
This is the case for Harley-Davidson. Their chief financial officer, John Olin, projected the new tariffs would cost them an extra $40 million in 2018, due to the increased cost to import materials. This economic hit has left the motorcycle company to consider moving production out of the U.S. entirely.
New Tariffs Could Directly Affect Consumers
While most other tax changes have not directly affected American consumers, these new tariffs against China could result in price increases on things people purchase every day. From canned goods to technology, large retailers like Target and Walmart have expressed concern about being forced to raise prices on their imported products.
In September, the director of global government affairs for Walmart wrote a letter to U.S. Trade Representative Robert Lighthizer discussing the impact the new tariffs could have on the American people. The message listed everything from clothing to dog leashes that would see a raised price after the new tax took effect. However, the letter stated that the worrisome increases could be on electronics, cosmetics and products for children. Walmart’s representative said she feared, “Increased costs associated with new tariffs could lead families to turn to cheaper, but less safe options to offset new financial burdens.”
What it Could Mean for Truckers
So, what does this mean for truckers across America? If less goods are entering the country and Americans are buying less due to price increase, it seems that truckers could also see a decline in job security. However, while these new tariffs could mean a lot of adjustments for businesses big and small, the chief economist for Freightwaves, Ibrahiim Bayaan, believes the demand for truckers will continue to increase.
He projects that these new tariffs will inspire businesses across the country to stock up on goods before the new tax comes into play. This would mean, in the short term, even more work for truckers as the surplus of goods flow in. Bayaan states that this extra backup of goods will give businesses time to come up with a plan to stay ahead of the tariffs and not allow it to affect their business or their prices for long.
This means that business will remain consistent and even increase for truckers. As more factories and manufacturers become a part of the U.S. economy, the transportation of goods will only grow in demand. Into the foreseeable future, despite any tariffs or AI advancements, there will still be a large need for commercial truck drivers all around the country.
Do you need help with your commercial vehicle loan? Contact Mission Financial for all of your financing needs.
This holiday season is off to a record-breaking start; from Black Friday, to Cyber Monday and beyond, sales have skyrocketed in store and online. In fact, a record-breaking $6.22 billion was reported from online sales alone this Black Friday, which is a 24 percent increase from last year. And not only are there more sales this year, but the average order value has increased to $146, an 8.5 percent increase from 2017. Cyber Monday also had its most-ever sales at $7.9 billion, a 19.4 percent increase from last year’s $6.6 billion.
According to the National Retail Federation (NRF), November and December make up nearly 20 percent of annual retail sales, and this number is only expected to rise. These increased sales mean big things for the U.S. economy and businesses everywhere. They also force consumers to reflect on how important truck drivers and the freight industry are during the holiday season.
Communities Rely on the Trucking Industry
Studies show that 80 percent of communities across the U.S. receive all of their goods by truck. That means that without truck drivers, the large majority of the U.S. would not have access to food, clothes or supplies all year-round. This becomes even more prevalent during the holiday season, as families around the country rely on truckers to deliver the food, decorations, and gifts to help fulfill their family traditions.
Without truck drivers, packages would not arrive at people’s homes in time for Christmas or other days of celebration, office shelves and storage closets would remain empty year-round, and retail establishments would have no products to sell. Especially in areas that have no alternative means of delivery, businesses rely on weekly or monthly shipments from reliable truck drivers in order to make a profit throughout the season.
Truckers Help Keep Holiday Roads Safe
During Thanksgiving alone, an estimated 54.3 million Americans traveled at least 50 miles away from their homes; a 4.8 percent increase from last year. As more and more people start traveling for the holidays, the risk of accidents also increases. However, each year, truckers are doing their part to keep the roads as safe as possible through extensive training, innovative technology and safety communication campaigns. In fact, the American Trucking Association invests over $9 billion annually into these facets. This is to ensure truckers are well-trained and given the best, most up-to-date vehicles possible, so that everyone can arrive safely during the holidays and year-round.
Rise of Online Shopping and the Freight Industry
Because of the rise in Amazon’s frictionless shopping experiences, low prices, and same-day / two-day deliveries, consumers now have heightened expectations when it comes to shopping. People want a personalized experience, the lowest price, and as little social interaction as possible. Most importantly, they want their merchandise immediately. This phenomenon called “The Amazon Effect,” has left traditional online and retail stores to alter their business models to keep up. However, for many businesses across America, competing with Amazon will be impossible. In fact, industry analysts project that 20 percent of retail stores will be permanently closing their doors in the next 5-7 years.
For the businesses that wish to stay afloat, fast shipping is a must. This has inspired solo truckers to pair up, so they can alternate shifts and keep the truck moving all day and night. One trucker will sleep while the other drives, usually switching every 10 hours. Fast shipping is especially important during the holidays because the percentage of online shoppers increases dramatically during this time. Last year, for example, there was a 16.9 percent increase in online shopping during the fourth quarter. Truck drivers have to work tirelessly to make sure every gift, package and holiday parcel arrives at its destination on time.
The Demand for Truckers is Increasing
As time goes by, despite concerns about new AI, the need for truck drivers is only going to increase. According to the American Trucking Association’s “U.S. Freight Forecast to 2024,” there will need to be a 20 percent increase in freight volumes of all kinds to keep up with demand by 2024. This report, originally published in 2013, has proven prophetic in the increase we have already seen within the trucking industry, and the numbers are only getting higher. Additionally, due to the new tariffs rolling out against overseas trade, U.S. trucker demand will skyrocket again as more and more goods are manufactured and distributed in the U.S.
Tis the season to be grateful for truckers everywhere, and if you are considering becoming a commercial truck driver yourself, there is no better time to get started. Jumpstart the process and get yourself behind the wheel of a big rig as soon as possible and leave your financing needs in the capable hands of Mission Financial.