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Today’s post will take a look at the major issues facing the trucking industry in 2011.
The trucking industry is leading the economy out of the recession, however just as it is one of the first industry sectors to feel the benefits of recovery, it is also one of the first to feel the adverse effects of any stalling in the economy.
What are the major issues facing the trucking industry as we continue into 2011?
Gas Prices
California is already experiencing $4 a gallon gas prices, and the rest of the country is seeing increases across the board. When it costs over $1,000 to fill up a rig you know there is something going on which is seriously causing headaches for everybody’s financial planning and budgeting. We can expect more fuel increases as the Middle East unrest continues to gather pace, particularly with US military involvement in Libya and elsewhere in the region. Upwards pressure on oil prices is going to increase due to increasing demand from every sector of the economy as business and consumer activity heats up.
Shortage of Drivers
The trucking industry shed over 300,000 jobs during the recession, however it wants those drivers back now. 200,000 driver jobs are expected to be created this year alone, with a similar number in 2012. The incoming HOS rule changes are going to amplify the shortage of drivers on the road, as existing drivers see their road time increasingly restricted.
Rising Freight Costs
Increases in demand, shortage of drivers and also a shortage of trucks (there has been a 13% reduction in trucks on the road between 2008 and 2010), are all going to put the cost of freight under pressure to increase. This is in addition to the general inflationary pressures which accompany the economic environment as we move out of recession and into recovery – as demand picks up, so will the price until equilibrium is established.
North American Free Trade Association (NAFTA)
We already know two key things: the behind closed doors negotiations between Hilary Clinton and her Canadian counterparts on an actual re-negotiation of the NAFTA treaty, and the new cross-border trucking deal with Mexico. Part of the renegotiation is going to address the NAFTA Superhighway, linking Mexico, through the US to Canada and creating an East/West divide to rival the North and South one.
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