Demand for trucking hits record level
BUSINESS RECORD STAFF Sep 24, 2015 | 8:47 pm
1 min read time
277 wordsAll Latest News, TransportationA recovering U.S. economy is driving record demand for trucking, the Wall Street Journal reports.
Still, the smaller operators who make up the majority of the 470,000 for-hire fleets say they’re missing out on the boom because of regulations and other challenges.
The amount of freight hauled along the nation’s highways hit an all-time high earlier this year, fueled by improved retail sales and factory output, the newspaper reported. Trucking industry revenue has grown an average of 6.5 percent a year since 2009, topping $700 billion last year for the first time, according to the American Trucking Associations.
But costs are rising, too. The industry is struggling to attract enough new drivers, forcing companies to raise pay or offer sign-on bonuses. New regulations, including rules capping emissions and limiting drivers’ hours on the road, are adding to truckers’ expenses.
Small and mid-size trucking companies are finding they are ill-equipped to adapt. Hundreds of these firms, with an average fleet size of about a dozen vehicles, have gone out of business in the past two years, according to Avondale Partners LLC. Others have sold out to larger competitors, which are more likely to have cash reserves or access to financing to weather changes in the industry. If large numbers of small fleets fail, it can reduce overall capacity enough to raise costs for shippers, analysts say.
“It simply takes more manpower, technology and capital to operate a truck line than it did even a few years ago,” said Steven Dutro, managing director of Transport Capital Partners, which specializes in trucking mergers.
Ben McLean, CEO of Ruan Transportation Management Systems Inc. addressed the trucker shortage in our Closer Look earlier this year.
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