Noteworthy trends in trucking
By: Phil Sneed
With fall in full swing, new trends are emerging that may lay the groundwork for what the trucking industry may be in store for in 2017.
Trends come and go, but they are always important to keep an eye on. Close observers will be be able to spot opportunities for future growth that puts them at a competitive advantage. In other ways, trends can provide insights to companies and their leaders about challenges that may be forthcoming.
In the trucking industry, the following trends that are worth keeping an eye on range in their impact on the industry.
Next year is shaping up to be interesting when a flurry of regulations start to make an impact. The second phase of the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration doesn't officially start until 2018. However, fleets are starting to make preparations in order to abide by the regulations.
"Next year is shaping up to be interesting when a flurry of regulations start to make an impact."
These fuel efficiency guidelines will have an impact on the semitrailers a fleet will need to obtain. While regulations will gradually be phased in from 2018 to 2027, fleets will need the entire phase in period in order to comply.
Luckily, since the EPA and NHTSA announced the final regulations in August 2016, truck suppliers and manufacturers have praised the move. In an interview with Trucks.com, Daimler Trucks North America CEO Martin Daum said it's a positive sign that compliance standards will be non-disruptive because of a 10-year phase-in period.
Regulations and compliance mandates are even being simplified and pushed back one year to help smaller companies ease into the transition.
Another upcoming mandate: electronic logging devices. Although its phased-in compliance period, which starts Dec. 18, 2017, is still nearly one year away, carriers and drivers should still understand the mandate and what it entails.
As companies need to meet deadlines for regulations, they will need more equipment, which leads into the second trend.
Transportation leads financing
When companies need new semitrailers or other pieces of equipment, leasing and financing is an alternative method over buying. In many ways, it can be the better option because fleets can avoid using outdated materials while also taking advantage of the Section 179 tax benefits.
And according to the 2016 Survey of Equipment Finance Activity from the Equipment Leasing and Finance Association, the transportation industry represented 7.3 percent of new business volume, up from 6.4 percent in 2013.
"The transportation industry represented 7.3 percent of new business volume."
Throughout all of 2015, transportation companies accounted for 29.7 percent of equipment financing new business volume.
Of the equipment being leased, trucks and trailers are at the top.
There's no way around it: Today's political landscape has an effect on the transportation industry.
One of the biggest challenges is appealing to legislators to provide the necessary funding to update and maintain road infrastructure. It's no secret that some of America's roads and bridges are in need of major repairs, yet the money for renovation is not being allocated. Poor infrastructure affect drivers, as it may mean utilizing longer routes to avoid trouble spots.
Bill Graves, who recently retired from his position as president of the American Trucking Associations, told The Commercial Carrier Journal that billions of dollars are needed to enhance the safety of roads and bridges.
"To move this nation's economy, we have to figure out a way to make our infrastructures safer," said Graves. "Estimates say we need to spend $100-170 billion. Currently we spend about $60 billion."
The transportation industry is fast moving. With so many trends emerging, shippers, carriers and other companies will benefit by having an idea of what's on the horizon.