Make hay while the sun shines on trucking
I’ve been accused, at times, of being a little too cynical. Yeah, maybe I’m a bit jaded. You have to be in this business.
But despite that, it’s hard not to be optimistic about 2018 and what it’ll mean for the trucking industry. All key indicators are pointing towards a fantastic year for freight volumes and trucking rates. Orders for new trucks and trailers are setting highs not seen in several years, signaling optimism among trucking providers. This potential year of prosperity must and will trickle down to the professional drivers and owner-operators who keep the freight moving.
I’ve watched these cycles play out before, and they usually begin with the arrival in my inbox of press releases from U.S. carriers boasting of significant signing bonuses and pay increases. I remember in the last cycle being wowed by an offer of $10,000 for new teams from one large carrier. Just a couple weeks ago, Covenant Transport sent out a release promising team bonuses of $40,000. That’s a lot of money.
It cited a rise in demand for team freight, which makes me wonder if we aren’t already seeing some impact of the U.S. electronic logging device mandate on trucking industry productivity. (Are loads that previously got done by solo drivers now requiring teams to meet the same delivery schedules, thus shifting more freight to carriers with team capacity)?
These types of aggressive sign-on bonuses will predictably cause more driver churn within the industry, and force other carriers to step up their own pay packages or find other creative ways to attract and retain drivers. (Another U.S. fleet equipped all 250 of its trucks with satellite television, for example).
And the trend is not limited to the U.S. We have also seen announcements from several Canadian carriers that they, too, are increasing driver pay. I don’t think for a moment this is some altruistic act on their parts. (There I go, being cynical again). It’s just sound business management.
With rising freight volumes, tightening capacity, and, finally, a potentially greater acceptance of rate increases from the shipper community, trucking companies that have been around this cyclical business for any time at all realize the importance of making hay while the sun shines. And you can’t make any hay without professionals to operate the equipment.
I believe 2018 will be a good year for the industry, and especially for drivers, who in most cases were due a pay increase. But that’s not to say the year will be without its challenges. Fleets and owner-operators will also be dealing with rising input costs, such as fuel and higher equipment costs, especially if the Canadian dollar weakens further. As of this writing, the uninterrupted continuation of NAFTA remains very much in doubt, with U.S. President Donald Trump cranking up the rhetoric once more. And the Canadian economy, while in slow, steady growth mode, doesn’t exactly inspire a ton of confidence that a long-lasting run is in the cards.
But for now, the sun is shining on trucking. Let’s all make some hay.
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