Something that the pandemic has proven is that despite travel restrictions and the like, transactions both online and offline are still a necessary aspect of society. With that said, the importance of the trucking industry is more than ever appreciated.
That’s due to the impact of their service in our daily lives. All those Amazon purchases won’t be making it to our doors on time if not for these hard-working individuals.
Why Is This Important?
The significance of the matter lies in the fact that the trucking industry has been facing challenges for some time now. Previous years have seen those concerns shut down due to the fact that people just didn’t appreciate how important they are to the economy.
Add to that the fact that most businesses rely on suppliers for their products. Limiting the capacity of the trucking industry will negatively affect the output of those businesses as well.
Well, with recent events it seems timely to bring up some of the more apparent and addressable challenges that the trucking industry has been facing. We’ve compiled a list of the most common challenges faced by trucking companies down below.
Top 5 Challenges
It would be no small task to gather and summarize all the challenges that the industry faces but we’ve done our best to break down the most common of these challenges. These challenges cover a more general approach to the problem.
1. Truck driver shortage
With the prevalence of home delivery services and the need for and more and more supply reaching stores, truck drivers have been in such a high demand that a shortage is already being felt.
This was seen in the backlog of orders during the peak of the pandemic. With fewer and fewer truck drivers able to do their job, purchase deliveries came to a halt, causing customer complaints and hurting businesses all over the country.
Another reason for this shortage is that a lot of truck drivers end up being burned out after a few years of service. With low driver retention, trucking companies will need to address this right away to avoid having to hire frequently.
2. Changes in Truck Regulations
While the intention of regulation changes is benevolent in nature, meaning that these changes are meant to promote safety and better standards, the effect this has on the trucking industry is a constant race to keep up to date.
What happens then is that unplanned expenses are incurred just to avoid penalties. These expenses stack up, making it harder for these employers to maintain their current expenses. Short-term, this means the company has to go over budget for the meantime.
The long-term effect then is that companies are unable to keep all their employees updated with all the regulations while also limiting their hiring capability. With these limitations, it will be hard for both the employer and employee.
With that said, the problem really rides on the timely dissemination of this information to the affected parties. With little time to address these changes, trucking companies will continue to struggle with each update.
3. Driver Compensation
The thing with the trucking service is that unplanned scenarios happen all the time. Be it a terrible traffic jam en route or damage sustained to the vehicle, truck drivers more often than not face some sort of delay or risk on the job.
What this means is that truck drivers should be compensated for any risk they face or any extra time they clock in, right? Unfortunately, that is not always the case since, as we’ve mentioned, trucking companies already face a mountain of expenses just operating the business.
In 2019, the ATRI for the first time included driver compensation in their list of the top challenges faced by the trucking industry. With that said, it is apparent how widespread this problem is.
The long-term impact affects multiple things such as driver recruitment and retention. That’s due to the negative implications that working in the industry might carry if this goes on.
4. Deteriorated Infrastructure
While deteriorated infrastructure might not feel like a big problem for us everyday people they provide a variety of headaches for the trucking industry. From vehicular damages to detours, the consequences of these damaged infrastructures are expensive.
Add to that the safety concern that these contribute to the problem and the issue is much more grave. With all that said, the deterioration of the roads, bridges, and tunnels has a bigger effect than most of us realize.
Of course, trucking companies would have some form of insurance to cover their trucking operations which should soften any blow. Keep in mind though that these policies can’t cover any eventuality.
At the end of it though, the resources of these trucking companies won’t be enough to compensate for the risks they face. This is considering the fact that they will have to traverse these roads in any case if the client has the need for it.
5. Variable Expenses
Variable expenses involve expenses whose costs don’t remain at a specific level. We’re sure you know what it feels like to wake up to the news of an oil price hike. Imagine now if your whole business depended on those prices staying where they were.
Now apply that same problem to things like maintenance, toll fees, and lodging fees, and you can get a better understanding of the problems that the trucking industry faces every day.
Take maintenance for example. Maintenance, for one, is an absolute necessity in keeping the trucks running at optimal performance. Price hikes in this aspect will cripple the fleet of any trucking company.
These variable expenses add up over time and are felt most significantly when they occur within a few weeks of each other. The frustrating part is that trucking companies can’t skip over them as they are all necessary for operations.
What Can We Do About Them?
Now, it would be frustrating if we report all these problems without at least providing some achievable goals to support the trucking industry. While these may not cover all the points, these do provide a good starting point for interested parties.
1. Prioritizing a Retention Strategy
Companies that prioritize the development of a retention strategy will be able to focus their efforts on making sure that truck drivers working for the company don’t immediately get burned out or frustrated with the situation.
This can be done by conducting a regular meeting with both the administrative staff as well as the operations staff. Allowing the two “components” of the business to collaborate on goals, instead of simple task management, will create a sense of trust between the two.
Other ways to address this would be to provide channels of communication for drivers to air concerns. This way, a level of transparency can be maintained between both parties.
2. Establishing a Recruitment Program
Another way to support the industry is through the development of a program focused on the recruitment of truck drivers. This will give the industry more human capital in terms of their operations, especially when you consider the technicality of the job.
As a bonus, trucking companies can target these recruitment programs towards demographics previously unconsidered. This gives them channels towards minorities that have not been saturated by previous recruitment efforts.
One way to go about this would be to establish a form of apprenticeship that will ease the recruits into the job. Creating that interest and appreciation naturally will allow a more organic development of each recruit.
Another would be to highlight the qualities necessary to be a truck driver. In doing this, companies are able to help jobless individuals in identifying key characteristics necessary for the job.
3. Normalizing Appropriate Compensation for Drivers
With all that we’ve said about the different risks that truck drivers face, it shouldn’t be hard to understand why these drivers want more compensation for their efforts.
This one is challenging as this involves more planning on the part of the administration staff. The idea though is that driver compensation should be higher up on the list of priorities that trucking companies have financially.
With better compensation, we should see an improvement in both the retention and the recruitment of truck drivers.
4. Collecting and Organizing Researches on Delays
A long-time issue faced by the industry, as we’ve mentioned, is the eventuality of delays in their shipments. These delays cost the trucking company a lot as they mean more money has to be spent on storage and employee compensation.
Developing an understanding of these delays will then give the trucking company applicable data to improve their operational efficiency. This should then translate into lower operational expenses.
It might take some time to complete this research effectively but the benefits should be long-lasting. Considering how trucking companies aim to operate long-term, that shouldn’t be much of a problem.
The bottom line is that the trucking industry has long been overdue for some changes, both at the administrative level as well as the operational. Allowing the industry to adapt will open up new avenues for shipments and transportation.
The key is to stay up-to-date with the current affairs of the industry. You’ll find that keeping updated will help give you that extra boost when the time is right.
If we missed anything, let us know in the comments below!