What Happened to Trucking Companies in 2019?

Semi-trucks parked at a truck stop

Last year was not kind to the trucking industry. Nearly 1,000 trucking companies closed their doors in 2019. We’re not just talking about small companies either. Every part of the trucking industry, all over the United States, is struggling. What’s the problem, and what can we do about it? That’s what we’re here to find out.

A Number of Factors

The problems affecting the trucking industry stem from many issues. Here are five challenges the trucking industry is facing right now:

1) A Shortage of Qualified Drivers
Truck driving isn’t considered a prestigious career. Schools are encouraging all young people to attend college and get specialized, high-salary tech jobs. As many truck drivers age and retire, trucking companies are scrambling to fill the ranks.

2) High Labor Cost
Any time there is a labor shortage, wages go up. According to the Bureau of Labor Statistics, the median hourly wage for truck drivers is steadily increasing, making it more difficult for trucking companies to cover their labor costs.

3) Tariffs and Imports
Global trade is a major driver of trucking demand. U.S. government tariffs on Chinese imports, and China’s reciprocal tariffs on American goods, have had a significant effect on trade.

4) Increasing Overhead
Operating a truck is expensive. The prices for fuel, insurance, and maintenance are always going up. For many businesses, particularly small ones, the cost of operating trucks is becoming too great to bear.

5) Increasing Competition
Online retailers, particularly Amazon, are building fulfillment centers all over the country and hiring thousands of their own drivers to transport goods directly to their customers. These drivers don’t need any special training or a commercial driver’s license. Online retailers’ ultimate goal is to deliver packages by drone and eliminate the need for drivers and vehicles altogether.

It’s a difficult time for the trucking industry, but there is still hope for a bright future. Advancements like electric and driver-optional trucks promise to increase efficiency and reduce maintenance costs. The trucking companies who learn to adapt today will be the success stories of tomorrow.

Why Are Reefers Hot When the Weather Is Colder?

White semi-truck driving along snowy highway

Refrigerated, or “reefer,” trailers keep food, medicine, and other perishable cargo cold and suitable for market. It seems reasonable to assume the demand for reefer trailers would be greater in the warmer times of the year. However, this isn’t the case. Statistics show the demand for refrigerated trucking is actually greater during the colder winter months.

What Makes Reefers Special?

Manufacturers build temperature-controlled trailers to stricter standards than a regular trailer. They depend on sturdy walls and layers of insulation to maintain the proper temperature, which also makes them strong and durable.

Now what about those refrigeration units? They can do more than just keep things cool. A properly functioning reefer trailer can maintain a temperature range anywhere from -80 to 104 degrees Fahrenheit (-62 to 40 C). This makes a temperature-controlled, refrigerated trailer the ideal choice for transporting many types of goods year-round. Everything from meat and produce to medicine and electronics can be held at a stable temperature.

Some Things Don’t Freeze

Some foods can’t tolerate being frozen—for example, fresh produce and meat lose some quality when they’re exposed to subzero temperatures. Because so many families gather to share meals during the winter holidays, there’s more pressure on shippers to transport foods at the proper temperature, warm or cold, this season. As outdoor temperatures drop, maintaining the proper temperature inside becomes even more crucial. Failing at this goal means ruining a valuable cargo.

Some cargo must stay cold. Some cargo must stay warm. In either case, a temperature-controlled trailer is the right tool for the job. When shippers don’t have this hardware available, they cannot accommodate certain loads. Losing a customer is a difficult proposition for any business to swallow, especially in a low-margin business like trucking. A refrigerated trailer may cost more than $50,000, but the cost of not having the proper equipment could be much higher.

Even as temperatures drop, the demand for temperature-controlled trailers grows. This may seem counterintuitive, but there are compelling reasons for the trend. Next time you see a refrigerated trailer on the road, remember that they are more versatile than they seem.

The Role of Transloading in Logistics

Multi-coloured freight shipping containers

There are many ways to ship products and commodities around the world, each with its own advantages. Shipping by air is fast, shipping by sea is cost-effective, and shipping by rail is necessary to bring goods inland.

Almost all products spend time on multiple modes of transport as they make their way from suppliers to consumers. This makes transloading freight a crucial part of bringing goods to market.

Transloading is important for the final leg of shipping. While shipping by rail is efficient, trains cannot deliver everywhere. The last leg of delivery is usually over the road, on a truck.

Why Is Transloading so Crucial?

Shipping costs are the driver of logistics expenses for many businesses. The best way to maximize efficiency is to combine multiple shipping modes, leveraging the strengths of each one. To support those efforts, transload facilities should be tight operations where teams can transfer products efficiently from one mode of transit to another to put them as close to the factory, processor, or retailer as possible.

Transloading freight solutions make manufacturing, processing, and selling more efficient, improving the bottom line in three ways:

Simplified Operations
Transloading means all your freight arrives by a single mode of transport in the final leg. The receiving party can expect a full shipment in a truck, for example, instead of separate deliveries by truck and plane.

Reduced Shipping Costs
Transloading lets you choose the least expensive mode at different stages of the journey from the supplier to your site.

Lower Inventory
When your shipments arrive in smaller loads, you can carry lower inventory at a time instead of having to put surplus goods in storage.

Unless you’re located near a rail line or shipping port, transloading makes good business sense. While every shipping mode has its own advantages and drawbacks, trucking is the only one that makes sense for most destinations that aren’t on a country’s coastline. By using the least expensive mode for each different leg of the journey, transloading lets you simplify your shipping processes and expand your operations.