Whether you’re a carrier, trucker, or freight broker, it’s crucial for everyone in the industry to stay up to date on the latest news and trends. As a truck driver or carrier, it’s important to know the latest regulations and news so you know how to keep doing your job efficiently (and legally). For freight brokers, knowing what’s going on in the industry can help you manage your loads, keep positive relationships with your carriers, and continue to provide the best support possible.
To help keep you consistently updated on the logistics and transportation industry, we’ve decided to look back on each quarter and roundup the best resources highlighting the quarter’s most important industry news, trends, and happenings. Below are the highlights we found for the first quarter of 2018.
Remember to check back at the end of June for our second quarterly update.
1. After effects of Phase 2 of the ELD mandate
At the end of last year, phase two of the ELD mandate officially went into effect. From December 19th, 2017 and on, truckers are now required to log their hours electronically via an electronic logging device, or ELD. Now, we’re just a couple weeks away from another important date — April 1st — which is set to be the start of the enforcement and penalty phases.
With the looming deadline, it’s going to be important to keep an eye on those who have been avoiding complying to the mandate hitherto. A few FMCSA officials held a webinar on the ELD rule recently, and FreightWaves has the full recap you can read here. To summarize, the webinar discussed the rules and exceptions to the rule, including the agricultural exemption, uses of AOBRDs throughout the end of 2019, what happens when an ELD malfunctions, hours of service clarifications, and reminding all of the April 1st deadline.
Here are a few helpful resources to keep up to date on all information regarding the ELD mandate:
- The Federal Motor Carrier Safety Administration
- SupplyChainDive news
- Follow related hashtags on social media like #ELDmandate or #ELD
2. The truck driver shortage
For over the past ten years, the trucking industry has been dealing with the truck driver shortage. Many people believe this is due to age demographics or a difference in generational work ethic. Others claim it’s because the lifestyle of a trucker is often shown as less than ideal — whether it be the long hours, unfair wages, etc. And the recent ELD mandate is not helping the matter.
Whatever the reasons may be, we can all agree that the driver shortage is one of the most critical issues facing the industry. According to the American Truckers Association, “more than 70% of goods consumed in the U.S. are moved by truck, but the industry needs to hire almost 900,000 more drivers to meet rising demand.”
While the shortage has fluctuated over the years, it has yet to come close to a resolution. A recent analysis by DAT Solutions said at the beginning of this year, the available trucks versus the amount of loads was the lowest ratio since 2005. The Chief Economist of ATA said that, “even as the shortage numbers fluctuate, it remains a serious concern for our industry, for the supply chain and for the economy at large.”
So, what is the industry doing to reverse the shortage?
Many companies have to increase the wages of their current drivers to make up for lost hours on the road due to lack of drivers. And by attracting a younger generation of drivers, it might help replace the large number of drivers that are retiring every year.
It’s also been stated that the negative connotations associated with the “life of a trucker” has kept the job in the shadows – and simply increasing the wages and improving the benefits could solve a lot of the problem. In an article in the January 8th, 2018 issue of Transport Topics, Joe Chandler, President of SPI International Transportation, writes, “we have let real wages for drivers decline while paying more to our executives and more for our trucks.”
Plenty of blogs and news outlets consistently report on the ups and downs of the driver shortage. You can find some of them here:
Although the issue remains at a critical level, Supply Chain Dive has high hopes that the current capacity crisis will cause a growing need for drivers. Thus, pushing companies to improve their wages, benefits, etc. to attract more people. Joe Chandler believes since, “drivers are in high demand, [truck] driving should be a natural path forward for many of the nation’s underemployed workers.”
3. The Capacity Crisis
In our post about the crisis from last year, we discussed what it is, what’s causing it, and how businesses can handle the problem. To recap, a capacity crisis occurs when the industry has an abundance of loads, but is lacking the capacity (or trucks) to ship those loads.
Evidence of what’s causing the crisis points to fleet deterioration, loss of truckers with commercial drivers licenses, an increase in government regulations, etc. According to Supply Chain Dive, the ELD mandate and the driver shortage are primarily to blame.
Essentially, the reason there is a low truck supply is heavily due to the lack of drivers available to drive them. And the increased government regulations — such as the ELD mandate — are upsetting many of the already limited number of drivers in the industry. In a recent article by Forbes, it states that, “regulations such as these are…perceived by the drivers as an infringement on personal space [since] many consider their trucks to be a home away from home.”
Read more details on what’s causing the crisis, and how the industry is working to correct it, here:
4. Autonomous vehicles
Recently, there’s been a huge focus on the technology of self-driving, or autonomous, vehicles. It’s particularly popular in the transportation and logistics industries for a variety of reasons. Autonomous trucks can potentially lead to a more environmentally-friendly industry, save money on gas and other truck maintenance, and actually create more jobs — not fewer — for truckers.
Last year, Elon Musk unveiled Tesla’s first electric semi-truck, and Uber Freight recently announced it’s sending a driverless truck on a trip across Arizona. Other companies like Waymo, Starsky, and Embark aren’t far behind.
As technology continues to evolve at a rapid pace, it’s difficult to truly predict how autonomous trucks will impact the industry. We like to stay positive and hope the autonomous vehicle era will bring jobs, help the environment, and improve the way we transport goods. Unfortunately, not everyone agrees with that outlook.
Wired’s article, “What Does Tesla’s Automated Truck Mean for Truckers?” suggests that this new technology could actually worsen the driver shortage, and potentially worsen job conditions (i.e. force 24-hour shifts on employees because the driver would technically be ‘not driving’). It’s also important to mention that Uber is now under fire as one of their self-driving cars hit and killed a pedestrian, marking the first fatality due to an autonomous vehicle. Although this technology has been tested for some time, this is a brutal reminder that it’s still in its infancy.
Ultimately, there isn’t enough research being done yet on the effects of automation, so one prediction is as good as the next. Keep updated on the latest industry technology here:
5. Increasing sustainability within the industry
As previously mentioned, some pros of the autonomous technology would lower the industry’s carbon footprint, use less gas, etc. So, it makes sense that many within the transportation and logistic industries are aiming to implement more sustainable business practices.
The American Truckers Association is committed to establishing a bold sustainability program, and the American Transportation Research Institute shares best practices for sustainable trucking such as driving, vehicle, and public sector practices.
You can keep track of the companies who are making waves in sustainable trucking practices here:
6. President Trump’s New Tax Law
The ELD mandate is not the only way the government is impacting the industry. President Trump’s new tax law (and “trade war”) are more than likely to affect the industry.
The federal Tax Cuts and Jobs Act that was signed on December 22, 2017 will change how carriers account for buying and selling trucks. According to Transport Topics, “how the law will affect trucking businesses depends on business type.” If you’re a C Corporation, the federal tax bill lowers from 35% to 21%, but it’s important to keep in mind that C Corps have double taxation. S Corporations will choose between the lowest calculation of 50% of W-2 wages, 20% of taxable income, and 25% of W-2 wages plus 2.5% of all qualified property. Many businesses may look into restructuring their business, and sole-proprietorships may need to consider becoming an S Corporation.
Additionally, many are worried about the President’s proposed steel and aluminum tariffs will start a trade war.
Some helpful sources for staying on top of these new stories are:
Between government regulations and new technology, 2018 is bringing a lot of changes to the world of logistics and transportation. Whether you’re a truck driver, carrier, freight broker, etc., it’s important to be aware of what’s happening within the industry.
Know of any other important industry news or additional resources that we haven’t listed? Share in the comments – we’d love to check them out, too!