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While everyone has fully appreciated the low gas prices over the past year, nobody has enjoyed the depreciation quite like the American trucking industry. The Wall Street Journal reported that the industry generated a record $700.4 billion in revenue in 2014, 80.3% of all domestic freight. Bob Costello, American Trucking Association’s Chief Economist, credits the massive rise in revenue to a colossal jump in freight volume combatted with progressively limiting capacity per truck. Costello also reported that the ATA was responsible for 68.8% of all domestic freight, an astounding 9.96 billion tons in the past year.
Despite the massive increase in revenue, truck drivers are hard to come by. The ATA estimates a scarcity of 40,000 long-haul drivers that are needed to meet the rising demands of the transportation of domestic goods. Due to the shortage in drivers, however, the Wall Street Journal reported that the ATA’s revenue per mile rose from 149.4 in 2013 to 154.1 in 2014, an increase of 3.2%. Costello attributes the lack in capacity of truck drivers to more modern jobs that can keep you at home. The trucking industry faces a serious demographic dilemma, as young people simply are not signing up to be drivers. The average age of an American truck driver is 49, compared to 42 for workers in all other industries, per the Wall Street Journal. A significant number of truck drivers enjoyed an increase in salary of up to 12% during this influx of capital.
Furthermore, as incentive to stick with the business, several large trucking companies are now offering up to $2,000 signing bonus for those who stay at their jobs for only 90 days. This is due to the many truck drivers that use the job as a stepping stone to other job opportunities; they continue looking for work even after they have just been hired. Another factor of the trucking phenomenon is the decrease in fuel prices. The U.S. Energy Information Administration found that diesel fuel is $1.07 cheaper than it was a year ago, per gallon. Truckers often charge shippers based on fuel expenses, therefore the decrease in price per gallon has made shipping by truck the most cost-effective form of transportation.
If you’re considering taking the owner-operator route and starting your own trucking company, factoring can help you get there! Cash flow can pose a huge challenge for truckers, especially if your customers take weeks or months to pay. Factoring helps owner-operators get paid instantly to ensure truckers are prepared with the funds necessary for the next load.
