YOUNGSTOWN, Ohio – The region’s trucking industry has returned to more manageable levels compared to the frenzied pace of two years ago, as supply chains have smoothed out and technology continues to improve.
Still, executives say headwinds persist, such as higher fuel and insurance costs, while tougher regulatory measures loom on the horizon.
“During the pandemic, we were slammed,” says Scott Fleming, president of Aim Transportation Solutions, Girard. “We’re in a trough now, it’s not anything big. It’s holding steady and it should be better by the fourth quarter.”
Aim owns and leases 12,000 trucks under contract across the United States, Fleming says. Its logistics business – which provides a driver and dedicated transportation services to specific customers – operates another 500. Recently, the company opened new locations in Parkersburg, W.Va., and Warsaw, Ind.
Of major concern to the industry are new U.S. Environmental Protection Agency standards announced in March. According to the American Trucking Associations, the new rules would lower zero-emission vehicle rates for model years 2027 through 2029 – a measure that “will carry real consequences for the U.S. supply chain and movement of freight throughout the economy.”
ATA says that while the industry is committed to a pathway toward zero emission vehicles, it warns that forced zero-emission rates in later years would drive investments in battery-electric or hydrogen trucks, “limiting fleets’ choices with early-stage technology that is still unproven.”
Fleming says the proposed rules carry with them “a lot of unknowns” that could affect the industry. Should these emission standards be enacted, for example, they would drive the cost of a tractor rig up substantially.
“These engine emission rules by 2027 will bring up the cost of trucks by between $20,000 and $40,000 per truck,” he says. “There are a lot of unknowns right now.”
Several Aim employees attended the recent Advanced Clean Transportation Expo in Las Vegas, where industry specialists convened to discuss new technology in the transportation sector.
What is frustrating is there’s no clear pathway or direction on new technologies. “Industry technology continues to change,” Fleming says. “But there’s still no direction. For lack of a better term, it’s like the Wild West.”
Nevertheless, technology first introduced in the automotive sector has found its way into the heavy truck market, Fleming says. “New camera technology, lane assists – all of that technology in cars is slowing getting integrated into trucks,” he says.
What has improved over the last two years are lead times for new truck orders, Fleming says. “A couple years ago, there were allotments for OEMs [Original Equipment Manufacturers] for trucks,” he says. “Now, it’s open ordered and we’re experiencing normal lead times.”
In the wake of the pandemic, delivery lead times were more than a year out, Fleming notes. “Depending on the truck, it’s now three to six months,” he says. “It’s getting back to normal, and that’s nice to see.”
Another part of the business that’s trending in favor of fleet-run firms is a contraction among owner-operator truckers. Higher fuel costs combined with slower demand has convinced independent operators to seek work in the fleet market.
“There’s still a shortage of drivers,” Fleming says, “but losing drivers to the owner-operator has subsided.”
According to the Owner-Operator Independent Drivers Association, the average age of an owner-operator is 59 and the average owner-operator has driven a truck for 30 years. As of July 2023, the average net income for an owner-operator was $63,114, down 9% compared to 2022. In 2022, there were 1.7 million independent owner-operators in the industry.
Overall employment across the trucking industry has trended upward. Data from the ATA show that in 2022, 8.4 million people were employed in trucking-related industries. That year, employment throughout the sector was up 405,000 from 2021. Of those positions, 3.54 million were professional truck drivers.
Total freight tonnage carried by trucks in the U.S. is expected to increase 28% from 2021 to 2032, from 15.1 billion tons to 19.3 billion tons, according to ATA data.
Data also shows that the general freight trucking industry hit total revenues of $91.4 billion in 2022, up 9.8% compared with 2021.
According to a survey of trends compiled by CloudTrucks.com, the industry is likely to pump more investment in fleet management software and other technology, including cybersecurity measures. Also, the site projects that growth across the trucking sector in 2024 is expected to be more subdued, as companies contend with stubbornly higher fuel prices, higher insurance costs and driver availability.
However, the top concern among truckers is the state of the economy, according to the 2023 Critical Issues in the Trucking Industry Survey. Often, it’s the transportation industry that serves as an early barometer of where the economy is headed, as it gauges shipments from various sectors.
“Basically, everything is slowing down,” says Dave Eaborn, vice president of Pittsburgh-based Eaborn Truck Service. “I’m hearing it from everywhere we go.” The company operates 11 rigs that serve a 150-mile radius from Pittsburgh, including the Mahoning Valley and northeastern Ohio.
Eaborn says he started to notice the market slowing around May of last year. Much of his work is flatbed hauling, transporting manufactured goods to and from customers in the metals industry.
“We haul aluminum, stainless, titanium – we even haul products into the mills used in the steelmaking process,” he says.
He estimates business is down approximately 30% from this time last year. “Some of the places are even talking about laying people off.”
These cycles are not unusual in the trucking business, Eaborn says. “We’ve been in business 83 years, so we’ve seen this before,” he says.
During the pandemic, the trucking industry was inundated with small companies and independent truckers scrambling to fill demand, Eaborn says. “Everyone got into the trucking business,” he says. That placed pressure on freight rates, which have declined while other basic costs such as fuel and insurance have increased, he says.
“The prices are diving,” Eaborn says of freight rates. “On the other hand, my insurance renewal went up by 25%. Everything keeps going up, and now we’ve got guys cutting freight rates because business is slow.”
Other costs relative to Pennsylvania have also increased, Eaborn says. License plates, for example, increased to $27,000 total for the 11 trucks in Eaborn’s fleet. “That doesn’t include the $550 highway use tax we pay on each truck. In Pennsylvania, our fuel taxes are a lot higher than Ohio.”
At the same time, the company is finding it difficult to hire drivers, he says.
To help diversify, Eaborn purchased two vans several months ago that are serving the local market. “We started to dabble in van work just to see if we can get into that market,” he says.
The downturn is likely to weed out those trucking operations that are not well capitalized, forcing some to close, Eaborn says. “When it does do this, it’s sort of a cleansing,” he says. “It’s always been up and down.”