The trucking industry continues to grow as an economic driver in the US, employing close to 7 million people and carrying over 10% of the nation’s freight shipments annually. Despite its growth and importance, the trucking industry continues to face many threats that could put both freight shipments and jobs at risk if they aren’t properly addressed. To combat these threats, here are five of the biggest problems facing the trucking industry today, and what we can do about them.
- Technology
One of the biggest threats to the trucking industry is technology. Some companies are starting to offer autonomous trucks, which will eventually eliminate drivers from being needed in the industry. If a company can’t find a solution for this, then it could be out of business in just a few years. There is also an issue with modernizing truck design, as well as designing for safety issues that we have not yet discovered. And finally, there’s data security and privacy concerns over devices like GPS trackers and electronic logging systems. These devices collect data on drivers and their routes. With all this information on these devices, hackers may be able to steal sensitive data or cause accidents by tampering with these devices remotely.
2. Driver shortages
Transport companies are facing an alarming challenge: the lack of candidates for qualified and reliable truck drivers . The American Trucking Associations’ industry forecast predicts that there will be a shortage of 50,000 drivers by 2024. Many factors have contributed to this, including retiring baby boomers, low pay, long hours and bad working conditions.
Ineffective government regulations on driver’s hours (specifically those governing the number of consecutive hours a driver can work).
3. Unpredictability of freight rates
The rates and regulations for transport companies, which had to take into account the mobilization of cargo for trucks, is a major problem in the trucking industry. Supply and demand are in constant flux due to fuel prices, changing global markets, national infrastructure improvements or political events. Because freight rates are dependent on these factors, there is no way of knowing what they will be.
4. Lack of cooperation among competitors
One of the biggest problems in the trucking industry is a lack of cooperation among competitors. This has led to one company taking over a market and driving out competition, which can lead to a monopoly. It also leads companies to underpay drivers because they know they are not going anywhere.
5. Compliance with regulations
Compliance with these regulations allows transport companies to secure a competitive advantage in their industry. The problem is, there are so many different rules that it is difficult for a company to keep up with them all. A large trucking company may be able to hire lawyers and personnel who specialize in regulatory compliance, but smaller transportation businesses may not have the resources to do so. It is important for regulators and policymakers to find a way to make this task easier for small business owners.
These are the five biggest risks currently facing the transportation industry. American Dispatchers’ generous certificate of transportation insurance helps bear the brunt of these risks with products like workers’ compensation insurance and employer’s liability insurance.
Contact American Dispatchers today to get the information you need to keep your business running.
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