Future growth projected for freight
By: Phil Sneed
Freight volumes in the trucking industry are projected to increase approximately 29 percent until at least 2026, according to the the latest projection put forth by the American Trucking Association in collaboration with IHS Global Insight.
Shipment volumes are not the only area of projected growth. Over the next 11 years, freight revenues are also expected to grow an astounding 74.5 percent to $1.52 trillion. According to ATA, the industry topped $700 billion in revenue in 2014 for the first time in history. The projections show how valuable the trucking industry is to the U.S. economy as a whole. In a statement, ATA president and CEO Bill Graves said the 2026 forecast will help public and private sector executives make sound decisions.
"Knowing where the industry and economy is headed can help shippers and fleets make key business decisions and instruct lawmakers and regulators on the best policies to move our economy forward," said Graves.
There is one projection that should be looked at with caution. The report said that while trucking will remain the most dominant mode of freight transportation, its share of tonnage may decrease marginally from 68.8 percent in 2014 to 64.6 percent in 2026. Pipelines will reap the benefits more than other modes of transportation, according to ATA's report.
That being said, intermodal freight is projected to be the second fastest growing mode. Until 2021, intermodal freight tonnage is expected to annually increase by 4.5 percent. It is then projected to then increase 5.4 percent annually starting in 2022.
"Over the next 11 years, freight revenues are expected to grow an astounding 74.5 percent."
Class 8 truck growth
The ATA's report said usage of class 8 trucks will also increase by 2026. Currently, approximately 3.56 million of these trucks are in use, and that number is expected to rise to 3.98 million in 2026.
According to truck manufacturer Freightliner, class 8 trucks are the "ultimate heavy duty truck." Their gross vehicle weight rating equates or exceeds 33,001 pounds. Essentially, this is the upper weight limit of cargo a truck can haul. While hauling such a heavy load across various interstates, class 8 trucks have a reduced cost per mile and better fuel efficiency.
Further use of heavy-duty trucks makes sense, especially as the trucking industry is projected for more growth. According to Fleet Owner, 2014 was already an exceptional year for class 8 usage, as more trucking companies ordered the heavy duty vehicles.
However, there is still an ongoing driver shortage many companies must adapt to. If the industry is projected to grow as much as ATA projects by 2026, there is no doubt more drivers will be needed to meet the demand.
"Come 2022, the ATA estimates the industry may face a shortage of 240,000 drivers."
Come 2022, the ATA estimates the industry may face a shortage of 240,000 drivers. One potential idea that may alleviate the shortage is to lower the age limit for drivers, according to the Associated Press. Current federal law prohibits under-21 drivers from operating commercial trucks across state lines. Before Congress headed home for summer recess, a few politicians proposed lowering the age requirement to 18. Some states actually allow 18 year old to drive trucks, but only within the state.
There is not any one specific factor that has contributed to the shortage. It has been a combination of demographics, retirements and regulations. Lowering the driving age would open up an entire pool of potential drivers who may be looking to earn extra income while in college, or want to enter the workforce immediately after high school.
The proposal set forth would have some protection built in for younger drivers. According to an AP report, legislation would prohibit teenagers from operating overweight trucks and transporting hazardous materials.
As the trucking industry continues to see further growth, the current driver shortage must be kept in mind. Drivers will be needed to haul the increasing volumes.