Trucking is a service that is essential to the way the United States functions, even if it doesn’t seem like it.
Many people run trucking companies to provide this service. However, there are many challenges that these companies face. Some of these include road conditions, insurance premiums, and a shortage of drivers.
These are a few of the problems trucking companies experience. Some of these can be fixed to an extent and others are out of a company’s control. If you’re looking to start or run a trucking company, you should be aware of these.
Don’t let this discourage you. While there are challenges, there are also great benefits. Besides, which industry doesn’t have its challenges? This article will discuss some challenges that exist for trucking companies today.
What Obstacles Do Trucking Companies Deal With Today?
If you’re looking to start up a trucking business, there’s a lot to learn.
The challenges that exist might appear to be discouraging.
The most prominent of these is a driver shortage. The compensation for drivers is another major challenge.
Every year, the American Transportation Research Institute determines the most important challenges. We will discuss some of these. If there are any possible solutions, we will discuss those too!
Trucking remained strong in recent weeks as companies struggled to meet the high demand with a shortage of drivers. A Virginia trucking company said they were investing in better equipment in an effort to recruit drivers. https://t.co/SWUrClWCGL #BeigeBook pic.twitter.com/1sGN2eChRX
— Richmond Fed (@RichmondFed) May 30, 2018
The Shortage of Drivers
For four years straight, this has been the top challenge for trucking companies. This is according to a ranking by the ATRI. Many truckers are older people who are retiring. As they retire, these positions are not being equally replaced by younger people. This is resulting in a shortage of drivers with over 60,000 positions empty!
The solution to this is to increase the recruitment of young truck drivers. This can start with an apprenticeship program for those under 21 years old.
In this case, a person doesn’t need to commit to obtaining their CDL immediately. They can follow and watch a trucker. This can increase their interest and allow them to start learning ahead of time.
Companies can compete with offering higher wages and more benefits.
The pay for truck drivers is constantly on the rise. In 2019, the average annual salary was $58,000.
This was a significant increase from what it was two years ago.
Some believe that the scarcity of willing new truckers is due to the compensation.
Trucking is demanding. The nature of the job means that drivers can be away from home for weeks.
They may also have to frequently give up their nights at home to drive. Many truck drivers believe that the compensation needs to be better considering this.
Not only that, but some industries attract similar groups of people. This includes construction, for instance. The pay may be on par in these industries, or even better. People will leave trucking because these industries have a less-demanding lifestyle.
By analyzing pay in these industries, the pay for trucking can be competitive. This will make truck driving a more attractive option.
Performance bonuses are also a great incentive. How safe was the driver, how prompt were they? Measures like this can allow for bonuses.
Not Enough Truck Parking Space
Even for regular vehicles, it can be tough to find parking spots. Truck stops and rest areas are accessible to most trucks.
Oftentimes, trucks are forced to temporarily park their vehicles in large parking lots of department stores during overnight layovers.
This can result in fines, towing, and other annoying inconveniences like windshield or tire clamps
Strategically locating new truck stops on highways with heavy traffic would be a great help.
— Paul Doran (@pd72850) February 4, 2021
Increasing Insurance Costs
Insurance is required. It makes sure that incidents won’t cause a sudden strain on the company’s revenue. Paying a premium every year can take a toll. This is especially true when these costs are a good portion of the expenses to own trucks.
Insurance costs for every mile driven have increased almost 20% in the last five years.
For those just starting a trucking company, it gets worse. Smaller fleets get charged more. We have noticed smaller companies may pay triple what larger companies do.
For smaller companies, such large costs can result in the company closing down. So, it is evident why this can be such a major challenge.
Similar to fuel surcharges, insurance surcharges need to be considered. This would take some of the weight off companies. It would particularly benefit smaller companies who pay more per mile.
Poor Driver Retention
A major problem for many trucking companies is a high turnover of drivers.
Large trucking companies report a turnover rate of 82%. That’s a lot of drivers quitting!
There are things that trucking companies can do to increase the amount of years truckers will stay with the company:
One of the things companies can and should do is to ask their employees or contractors to fill out a survey form.
The company then uses the survey responses to improve the truckers’ experiences with the company.
Another way to improve retention is to offer better benefits, sick pay, vacation days, and insurance benefits.
Some of the issues facing trucking companies are out of their direct control. Truckers can get involved with lobbying congress for quicker and better roads, lowering costs of insurance and increasing rest areas for truckers.
The trucking industry can be a very lucrative and rewarding business as long as you understand the challenges and work through them.