Labor and fuel costs are two of the most significant expenses trucking companies endure. These transportation costs are on the rise and at a fast rate. These expenses are always increasing; however, it is more pronounced, and the rates are higher than they have ever been in decades. The increase in fuel and labor puts pressure on retailers and manufacturers to increase the price of their goods so they can still afford trucking expenses. With the labor and fuel prices rising, it makes it difficult to transport shipments.
With the trucking expenses rising, some owner-operators are leaving the industry and joining labor-starved industries that allow more home time with their family. In return, younger drivers are coming into trucking companies. Motor carriers try to attend to these new developments by increasing truckers’ pay.
How the Expenses for Trucks are Increasing
So why are the expenses for fuel and labor increasing? One may say the reason for the increase is that more jobs are opening, and trucking is a demanding career. Many truck drivers spend most of their time on the road and away from family. The increase in shipments and the labor shortage are not the only issues shippers are dealing with. Diesel fuel prices are also rising, and even though there are many fuel-efficient vehicles, the amount of time spent on the road, truckers typically do not see much of a savings. Larger shippers, such as Amazon, have not been as impacted as smaller shippers, but they are still impacted.
What Does This Mean for the Future of the Trucking Industry
Several independent trucking businesses have been forced to sell or close their doors. In some cases, companies are selling just for the market value of their assets, whereas others are at 3
– 6 percent of the customer base revenue.
However, if selling your trucking company is not an option, there are some solutions to consider.
- Use a substitute for fuel to lower the shipping costs, such as natural gas.
- Find different foundations for transportation, such as rail or air.
Prices of Fuel
- Using smaller trailers and engines for lightweight loads could help lower your fuel usage.
- Adjust your inventory based on value or manufacturing that is closer to customers.
- Use newer, lightweight packaging, which can help lower your fuel costs.
- Find the lower cost of fuel, which can consist of natural gas or oil drilling.
Cost of Labor
- Execute the different technology devices to watch and record drivers to help counteract the possibility of labor costs increasing.
- Increase turnover rates by executing changes to create a better lifestyle for drivers.
Cost of Trucking Expenses
- Support trucking technology to help increase your miles-per-gallon (MPG) by using lightweight trailers and engines.
- Adjust your loads, starting with transporting goods that are closer to the customer, which can reduce your number of shipments and payload amounts.
- Find and use a lower substitute for transportation.
Some options could lead to lower costs of freight. However, if these options are not explored, the prices will continue to rise.
With the truck driver shortage, if the trucking industry continues to decline, this could affect our economy. Americans rely on truck drivers to transport their goods. With trucking companies exploring the different options to continue business, trucking companies can work together to help lower the shipping costs of fuel and labor.