Key Factors Affecting the Trucking Market in 2023

If the US trucking industry were a country, it would rank top 50 in GDP annually. The trucking industry is generating billions of dollars. It is responsible for more than 5% of all full-time jobs and an astonishing 70 % of all the freight moved in the USA. With the industry being so large and powerful, there is undoubtedly more than one aspect influencing its market every year. Let's look at some of the critical factors affecting the trucking market in the year 2023 & beyond. Table of contents: Fuel Prices Driver Shortage in the Trucking Market Truck Parking Driver Compensation & Wages Turbulent & Unpredictable Economy

Fuel Prices

For many years, driver shortage reigned as king of trucking industry concerns and challenges. However, fuel prices have taken the throne because of all the turbulent events, including the Covid-19 pandemic and the war in Ukraine.

Fleets of all sizes scrambled to identify ways to cut costs due to record-high diesel prices this year. Fleets operating in the west experienced the highest fuel costs per mile at $0.431.

Owner-operators, who often work in the spot market with less ability to negotiate fuel surcharges, faced the most significant challenge due to high diesel prices. Fuel prices have been ranked as the number one concern for owner-operators for the second year in a row.

Driver Shortage in the Trucking Market

Driver Shortage, the top industry concern for five years, dropped to the second-highest concern this year. The American Trucking Association reports that the industry's current shortage of over 80,000 truck drivers could grow to over 160,000 by 2030.

Multiple factors contribute to the Driver Shortage, including a retiring workforce, the challenging lifestyle, and regulatory pressures that cause some drivers to leave the industry.

Industry stakeholders believe that there are multiple ways to reduce the shortage, such as lowering the legal driving age to 18, improving the driving lifestyle by expanding truck parking and reducing detention at customer facilities, and recruiting more women to the profession.

Truck Parking

Since 2015, the annual survey has consistently ranked the lack of available Truck Parking as a top-five issue. This year, it ranked third overall and, for the third year in a row, ranked as the top concern for truck drivers.

Driver recruitment and retention issues and efforts to attract more women to the profession are linked to the lack of available parking. Federal leaders are now gaining traction on the truck parking issue, including a recent announcement from the US Department of Transportation awarding nearly $40 million in grants to Florida and Tennessee to expand truck parking capacity.

Approximately 38.1 percent of respondents believe addressing the truck parking issue at the local and regional levels is the best strategy. Over 35 percent of respondents believe a dedicated federal funding program for truck parking is the best solution for addressing this perennial industry challenge.

Driver Compensation & Wages

Driver compensation has remained a top concern in the industry since it first appeared on the Top 10 list in 2019 as the third-ranked issue. This year, it is ranked the fourth most prominent problem, driven by post-pandemic freight demand and the growing driver shortage.

Fleets have increasingly used pay increases to recruit and retain the best drivers. According to ATRI's 2022 Operational Costs of Trucking research, driver wages increased 9.8 percent over the previous year. The driver wage figure ($0.809 per mile) achieved a record high since the Operational Costs research first launched in 2008.

Compensation is not the only factor that truck drivers consider when looking to join the industry or change employers, but it remains important.

Turbulent & Unpredictable Economy

During the Great Recession in 2008, the industry was most concerned about Fuel Costs and the Economy.

The Economy remained the top concern for three more years until it decreased in ranking and eventually dropped out of the top 10 in 2017. This year, the industry ranks the Economy as the fifth top concern due to skyrocketing inflation, equipment and parts shortages, record-high diesel prices, and continued wage pressures.

Inflation peaked at 9.1 percent in June 2023 and decreased slightly to 8.2 percent as of September 26th. Concerns about a global recession remain.

Conclusion

Despite these challenges, the industry continues to grow and is expected to be transformed by new technologies such as autonomous vehicles and electric trucks in the coming years. Keeping an eye on the industry news and staying up to date with world events is a must in this fast-paced Economy.