Issues Facing the North American Trucking Industry

Issues Facing the North American Trucking Industry
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Issues Facing the North American Trucking Industry
The major issues facing the trucking industry in North America include the economy, fuel prices, Compliance, Safety, and Accountability (CSA) PROGRAM, Congestion, Tort reforms, driver shortage, among others. These issues are significant because they have a direct impact on the industry with regards to the cost and easy of doing business. Much of the data that is used to highlight these issues is provided by the American Transport Research Institute, which conducts research in the transport sector to promote “a safe, efficient, and viable transport system,” particularly in the trucking industry.
The trucking industry is important to the economy of the three nations of North America (U.S.A., Canada, and Mexico), but more especially to the U.S. where it is responsible for transporting over 70 percent of all cargo transported annually. This percentage is equivalent to about $670 billion worth of retail and manufacturing goods transported in the country. When the $295 billion and $195.6 billion in truck trade with Canada and Mexico respectively is added, it becomes clear that truck traffic disruption will have a big negative impact on the economies of the three countries (U.S. Dept. of Transportation, 2013).
Issues of Concern
1 The Economy
Since 2009, the economy has been ranked among the most pressing issues that the trucking industry has to deal with from time to time (Heavy Duty Trucking, 2012). When the economy slows down, the trucking industry is the first sector of the economy to be affected as orders and purchases for good and international shipments reduces. According to the U.S. Bureau of Statics, the first signs of an economic downturn are seen in the trucking industry as tenders and contracts to haul goods dry up due to low volumes of traded goods. Indeed, many small scale trucking companies have gone out of business since 2009 as a result of economic global recession that began in late 2007. Economic crises often lead to high costs of operating businesses, which in turn necessitates increased regulations to avoid total economic collapse. The end effect of a slow economy is the reduction of domestic demand for goods, which has a direct impact on the trucking industry by reducing the demand for hauling services.
A number of strategies have been proposed to address economic problems in the trucking industry. First, there is a need to encourage policies that will accelerate economic recovery and boost the trucking industry by increasing the demand for freight services to transport goods. Economic recovery benefits the trucking industry directly and indirectly. Directly, it increases the volume of trade, which requires more transportation services to move industrial products as well as goods shipped from foreign countries. Indirectly, it increases consumer spending on goods. Consumer spending constitutes a larger percentage of any country's gross domestic product (GDP), and is therefore central to a thriving trucking industry as it pushes up the demand for consumer goods and services. This in turn pushes industrial production up to satisfy consumer needs. Increased industrial production translates into more goods to be transported. In general, the strategy is to implement policies that promote consumer confidence, spending, and industrial investment or production.
The second approach is supporting the trucking industry to a major job creator as a means of putting more people back to work. Besides hindering fast economic growth, high levels of unemployment reduce consumers' spending power. According to the ATRI, it is ironical that while unemployment rates in the U.S. stand at 9 percent, the trucking industry is contending with driver shortage in some regions. This shortage provides a big opportunity for the industry to emerge as a major employer, with some jobs that pay an average of over $39, 000 according to the U.S. Bureau of Labor Statistics (ATRI, 2013). Considering the number of people the trucking industry can employ at reliable salaries, it beats railroad and other transportation modes as a potential investment sector and booster of economic growth.
Addressing long term economic concerns such as trade deficit is another area of action that can help in stabilizing the economy and guarantee a thriving trucking industry. There is need to adopt lasting financial reforms to promote economic security. This approach, which includes addressing trade deficits and implementing sound fiscal policies, is expected to have short term and long term positive impacts on the economy by creating more jobs and promoting long term economic growth.
2 Hours of Service
The number of hours that truck drivers may spend behind the wheel nonstop per a day or in a week is another issue of major concern in the trucking industry (Finney, 2012). Most supply chains that depend on faster transportation of goods benefit when the duration of nonstop driving is longer. Reducing that duration makes it difficult for drivers to deliver their cargo on time. In addition, it negatively affects the drivers' earnings by shortening a day's working hours. Such delays can be costly for the shippers when they result in losses or lower profit margins.
The hours-of-service regulations that came into effect in July 1st 2013 in the U.S. reduced the daily and weekly driving hours for truckers, especially long trailers. Although they are still allowed to drive for 11 hours nonstop and put in 14-hours-days, the rules restrict the 34-hour restart window. In Canada, the Transport Canada's Motor Carrier Division is charged with promoting road safety for large commercial vehicles by promoting reductions in crashes, injuries and fatalities involving trucks and buses. Drivers operating across the border between Canada and the U.S. have to contend with the regulations of both countries, which allow for different nonstop driving hours. In the U.S. the length is 11 hours after a 10-hour off, while in Canada it is 13 hours after an 8-hoiur off (Heather & Keller, 2012). A trucker driving from Canada and has reached the 12-hour mark is technically in violation of U.S. rules. Therefore, observing the regulations of both countries poses a big challenge for cross-border operators. However, both countries prohibit driving after 14 consecutive hours behind the wheel.
Among the proposed strategies to address the issue is the need to continue publicizing the positive results achieved by the Hour-of-Service program in the trucking industry. The safety records achieved by the HOS program can encourage adherence to the guidelines on the duration that drivers can spend behind the wheel in a day or week. According to statistics from the National Highway Traffic Safety Administration, 2009 recorded the lowest ever levels of fatalities resulting from truck accidents (ATRI, 2013). The positive improvement is attributed to the Hours-of-Service regulations, a claim that is supported by records showing that fatalities had reduced by 33 percent since 2004 when the first HOS rules were implemented.
Another approach is to research new and more relevant ways of addressing driver fatigue. Given the scope of the trucking industry, it is difficult to come up with generic intervention programs that address all problem scenarios. In this regard, there is need for flexibility in the manner HOS regulations are applied and implemented. This calls for the deployment of scientifically proven approaches for countering fatigue. One example is combining driver education on the need for sleep and sleep hygiene, as well as the screening and treatment of sleep disorders as a comprehensive way of managing fatigue.
3 Driver Shortage
The shortage of drivers in the North American trucking industry has increased in recent years, particularly beginning in 2011 when it was ranked the third most serious issue. This trend has been interpreted as an indication of the economy's recovery, whereby more investors have entered the industry or previously closed businesses have resumed operations, leading to an increased demand for drivers (The Journal of Commerce, 2014). Viewed another way, it can also mean that the number of qualified truck drivers is simply not enough, as opposed to new job opportunities. Another school of thought is that more drivers in the baby boomer generation are coming into retirement, creating more vacant positions to be filled. Whichever the case, the trucking industry is challenged by lack of enough qualified drivers willing to do the job.
The trucking industry also needs to explore ways of retaining drivers for a long period. This may include developing programs that promote work-life balance and ensuing working hours are flexible to allow for leisure and time for family relationships. It is believed that improving the quality of life for commercial truck drivers can solve the shortage problem by attracting more qualified drivers into the industry. Employers should offer financial incentives and benefits that can enable truck drivers to maintain their families and good health, and reduce financial-related stress while on the road. This would help reduce driver attrition caused by those who get impatient and leave the industry to look for better prospects elsewhere (Cassidy, 2013). In this regard, employers may be forced to re-evaluate driver salaries and consider offering competitive remuneration and benefits relative to what other professions and industries pay.
4 Fuel
Fuel prices and fuel shortage is a perennial concern for operators in the trucking industry. In 2008 it was the number one concern, perhaps reflecting the state of the economy following the 2007 economic crisis. Commercial trucks consume an average of 53.9 billion gallons annually, o...