Top Issues in the Trucking Industry
The trucking industry's not-for-profit research institute this week unveiled its list of the top 10 critical issues facing the North American trucking industry.
The United States economy depends on trucks to deliver nearly 70 percent of all freight transported annually in the U.S., accounting for $671 billion worth of manufactured and retail goods transported by truck in the U.S. alone.
"Add $295 billion in truck trade with Canada and $195.6 billion in truck trade with Mexico and it becomes apparent that any disruption in truck traffic will lead to rapid economic instability," the American Trucking Associations (ATA) says.
The American Transportation Research Institute (ATRI), the trucking industry's not-for-profit research institute, this week unveiled its list of the top 10 critical issues facing the North American trucking industry.
Topping the list: the economy, which debuted on the ATRI's annual list last year.
In 2009, more than half of respondents (52 percent) ranked the nation's economy as the No. 1 issue with which the trucking industry must contend. Truck transportation is one of the first sectors to slow as orders for goods and shipments dry up during an economic downturn, according to the U.S. Bureau of Labor Statistics.
Before the financial collapse slammed the trucking industry, the sector enjoyed year-on-year growth. In 2007, trucks transported 57.8 percent of the value of trade between the U.S. and Canada, up 3.4 percent from the previous year, and transported 66.2 percent of the value of trade between the U.S. and Mexico, up 4.8 percent, according to the ATA's 2008-2009 American Trucking Trends report.
Analysts see much different conditions for 2009 and beyond, as a large number of small trucking operators have already gone out of business since the recession officially began in December 2007, logistics analyst Transport Intelligence says (via Supply Chain Brain).
Economists believe that freight volumes will not lead the way out of the downturn, as demand for goods has declined quicker than in previous recessions and existing supplies of both raw and manufactured goods remain high.
Government regulation climbed two places from last year to become the second most critical issue for the trucking industry in 2009.
"This year's ascension of government regulation could be attributed to the changes in the national political landscape and election results at the federal, state and local levels," the ATRI report says. "Many industry stakeholders anticipate a new era of costly government mandates."
Fuel, a perennial concern for the trucking industry, dropped from No. 1 in 2008 (and 2005) to No. 3 on this year's list. Commercial trucks consume 53.9 billion gallons of fuel each year. About 39 billion gallons, or 73 percent, is diesel, according to the ATA. Reflecting the ongoing volatility of energy prices, fuel has remained a top-three issue for five consecutive years.
Until several years ago, the average price of diesel fuel was usually lower than the average price of gasoline. Since September 2004, however, "the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons," according to the U.S. Energy Information Administration (EIA).
After peaking at more than $4.70 per gallon in July 2008, the national diesel fuel average declined 45 percent by September 2009. In its Short-Term Energy and Winter Fuels Outlook, released this week, the EIA projects diesel-fuel retail prices, which averaged $2.63 per gallon in August and September, will average $2.60 during the fourth quarter of 2009.
Congestion/Highway infrastructure rose two places to No. 4 this year. Congestion and an overstressed infrastructure continue to worsen, slowing freight delivery, creating unpredictability in supply chains, increasing the cost of consumer goods and altogether diminishing the competitiveness of U.S. businesses.
"The underlying factors behind this issue are becoming more prevalent; ongoing congestion impacts, deteriorating highway infrastructure and increasing interest in dedicated truck lanes and higher-productivity trucks have all worked together to put this issue at its highest level to date," the ATRI report makes clear.
According to The Road Information Project, 36 percent of the nation's major urban highways are congested, while the American Society of Civil Engineers' 2009 infrastructure findings show that one-third of America's major roads are in poor or mediocre condition.
Rules regulating commercial driver hours-of-service (HOS) remain in the fifth spot this year. The ATRI notes that HOS has been a top-10 issue since 2005, having peaked at No.1 two years ago.
"Given the costs incurred by the industry in adapting operations to several HOS rules changes since 2005, the industry is closely monitoring HOS and related EOBR issues," according to the new report.
Rounding out the top 10 critical issues in the trucking industry this year: commercial driver issues (driver shortages); environmental issues (anti-idling regulations and equipment mandates); tolls/highway funding (state and federal shortfalls and GPS-based mileage taxes); truck size/weight (proposed limitation revisions); and onboard truck technology (Electronic Onboard Recorders, in particular).
In addition to analysis of each trucking industry priority, the ATRI's survey also proposes potential strategies for addressing each issue.
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