There are approximately 1.2 million trucking companies in the U.S.A, of which, 97% operate with 20 or fewer trucks, and 90% with six or less. When you think of a trucking or logistics company, who comes to mind? According to ehow.com, the top two are UPS and FedEx, followed by Schneider National, Roadway Express, and Yellow Freight. I think of our customers, Celadon and Knight Transportation, both in the top 100, but what about the little guys? If 97% of companies have 20 or fewer trucks — aren’t the little guys the backbone of the industry? In an industry with 15.5 million trucks, 3.3 million employees, and 1.9 million tractor trailers, this industry is vital to our nation’s economy. What challenges do smaller trucking companies or owner/operators face?
Rising Fuel Costs
In 2008, when diesel fuel prices soared, some truckers protested, others went out of business, and some looked for alternative ways to reduce fuel costs. Modern diesel engines, aerodynamic improvements, and hybrids all have proven to improve fuel economy, but at what cost? The little guy may not have the resources to update his fleet.
According to CFIRE, “In these urban areas alone, delays represent nearly $6 billion (of the $33 billion nationwide) in freight-related congestion costs for the more than $1.3 trillion of total commodity value that moved through these areas in 2009.” Delays due to traffic congestion affect us all. The lean or just in time manufacturing system uses tractor trailers as rolling warehouses and when they are delayed, entire manufacturing lines can be stopped, awaiting parts and materials. This cost is passed on to all of us, but the small trucker has a more immediate impact – he or she losses the opportunity for more loads.
If you own five trucks you can’t drive them all, and finding (and keeping) drivers has become difficult. The trucking industry is currently short 150,000 drivers. Smaller companies may not have the resources of larger trucking companies to advertise, train, and support drivers.
New Hours of Service (HOS) regulations limit the time drivers may be in service, proposed legislation such as Electronic On Board Recorders (EOBR) and aerodynamic improvements may offer a long term pay back, but, once again, how will the initial cost affect smaller carriers?
The trucking industry is integral to the American way of life and small business has always been a cornerstone of the American dream. TKO Graphix supports the trucking Industry large and small, and we tip our hat to all who keep our country running. For more on trucking industry issues, you should visit the American Trucking Association (ATA).