8 ways 2018 will transform trucking
From a dearth of drivers to the constant challenge of keeping up with evolving transportation rules — electronic logging, anyone? — the last year brought plenty of change to the trucking industry.
Emerging technologies already hitting the logistics market range from on-the-road communication tools to digital fleet management platforms that give operators unprecedented visibility into exactly where trucks are and when.
In the months ahead, look for that pace to continue — and for a few issues to break away from the pack when it comes to the potential impacts for fleet owners, drivers and those who depend on them.
1. Bracing for the silver tsunami
Driver recruitment and retention will continue to loom large in 2018, particularly as retirement accelerates among baby boomers in the trucking industry. The turning tide can be traced back to the deregulation of the industry in the 1980s, when The Federal Motor Carrier Act spurred many young entrepreneurs to enter the field. Fast forward 38 years, and staff are looking to retire as owners scout options to sell.
As it stands, the U.S. employs more than 1.8 million heavy-duty truck drivers, according to the Bureau of Labor Statistics. The agency expects that number to grow about 6 percent a year until 2026, creating some 108,400 jobs paying an average of more than $41,000 annually.
Industry groups like the American Trucking Associations contend that employment numbers may be even higher—and that rising turnover on top of shifting demographics has already created an urgent situation.
“Since bottoming out at the end of 2016, the turnover rate at larger fleets has steadily risen — a function of an improving economy, rising demand for freight transportation and fierce competition for drivers,” said Bob Costello, the trade group’s chief economist, in a December 2017 forecast. “The tightening of the driver market has raised fears about the driver shortage, which will hit an all-time high this year.”
2. Consolidation: The big get bigger
In addition to an onslaught of generational change in ownership, which may be particularly appealing for smaller firms contending with plentiful competition and tightening regulations , a string of recent transactions in the trucking work could also signify more consolidation to come. That goes for both trucking equipment businesses and the software companies rushing to supply them with new technology.
Just look at Daseke, North America’s largest flatbed equipment provider, which acquired three firms with combined revenue of $320 million to close the end of 2017. As a result, the company told Reuters it expects revenue to grow from $650 million last year to $1.2 billion in 2018.
“There is a tremendous opportunity to consolidate what is a very fragmented market,” Daseke CEO Don Daseke told Reuters.
In the trucking tech world, look for that momentum to be echoed by larger software companies buying up smaller players, offering increased visibility or more complete supply chain solutions. This has so far been especially true in the cloud-based software sector. Logistics tech provider Descartes Systems Group, for instance, has bought out both Aljex and Macropoint, and dual hardware and software company Trimble snapped up 10–4 Systems last fall.
3. Real-time responsiveness
As hiring fluctuates, increasingly sophisticated transportation management systems back at the home office are also likely to yield more tools to manage entire fleets from afar.
Though technologies that promise to increase visibility into truck locations and delivery status have been around for decades, increasing speed and precision are the two variables to keep an eye on in future generations of such products.
The holy grail for realtime logistics: providing more delivery details while also avoiding alert fatigue for shippers and carriers. Day to day, that means skipping notifications for on-time trucks, but promptly flagging late shipments as delays happen to allow for dock loading time adjustments.
At the heart of this issue is the way visibility is defined — not only knowing where trucks are, but the ability to set expectations around arrival times so that warehouse staff, dispatchers, and others along the supply chain can adjust and handle loads efficiently. With one properly-scheduled delivery, it also becomes easier to coordinate the next pickup or delivery, creating a positive chain of events.
4. Seeing the future
Keeping a finger on the pulse of current conditions is one thing; predicting change in advance is another. The world of predictive analytics is vast, and driver-specific data is already being used by companies looking to predict potentially-dangerous events before they happen.
But the race for more precise analytics extends beyond safety. With increasingly advanced artificial intelligence will likely begin playing a bigger role in the field, cost-saving priorities like fleet maintenance also stand to be impacted in a big way.
“When you pull all of this together, you could start to predict component failures with enough certainty to change a $25,000 part before it fails,” Dick Hyatt, chief executive officer of Decisiv, told the Commercial Carrier Journal last year. “It is a little bit of a dream right now, but I can see it will happen over the next several years.”
5. On-the-road connectivity
Maybe it’s obvious that connectivity is top of mind for a connected logistics startup. Even so, mobile technology is making it easier than ever for drivers to stay in touch with the home office.
From document scanning to logging driver hours on the fly, digitizing time-intensive paperwork is one key competitive advantage for mobile apps capable of integrating with enterprise software. Though older-model phones and cellular dead zones in the past have created gaps in communication, more adaptable programs and offline capabilities are filling the void.
Particularly in a climate where there is a drought of drivers, carriers looking for ways to increase efficiency and retain talent are also gaining a competitive advantage by providing tools to get drivers paid faster and reduce hassles involved with paperwork.
6. New links in the blockchain
In years past, the promise of fully digitizing business records via Electronic Data Interchange (EDI) seemed like a game changer for trucking companies looking to more precisely track freight loads. Now, a generation later, blockchains — distributed transaction ledgers first developed to trade cryptocurrencies like bitcoin — have the potential to be what EDI wasn’t, giving all partners in the shipment lifecycle visibility into freight moves.
One big catch: It’s unclear if the incentives are aligned for all parties to participate in such an open network.
Standards need to be agreed upon, and our take at LoadDocs is that the adoption has to be pushed by shippers. Otherwise, history stands to repeat itself with adoption of the technology remaining just as fragmented as past attempts at digitization.
7. The self-driving quandary
With competition for qualified truck drivers tighter than ever, the advancement of semi-autonomous and autonomous driving technologies is something of a wild card in the industry.
From Embark’s recent cross-country test drive to last year’s Anheuser-Busch practice run for self-driving truck technology pioneered by Uber, a range of experimental efforts highlight a key challenge for companies looking to stay ahead of the curve on new systems: doing so without alienating current employees.
Still, as efficiency- and safety-focused companies like Peleton Trucking illustrate, there is an emerging class of solutions that aim to bridge the gap between human drivers and all-autonomous controls. Peleton, the startup that offers a system connecting consecutive trailers in a single “platoon” using vehicle-to-vehicle communication, also promises that, “Drivers choose when to platoon and always retain primary control of their own trucks.”
8. The Tesla of trucking?
Electrification of consumer cars poses plenty of logistical challenges when it comes to prerequisites like charging infrastructure. In the trucking industry, those potential roadblocks are super sized with heavy-duty vehicles.
Aside from Tesla itself, manufacturers like Cummins, Fuso and electric bus manufacturer Proterra are all circling the electric truck market. Range anxiety about charges than can last long hauls are one obvious challenge — the current range for electric trucks is about 150–300 miles per charge — but advocates contend that hybrid and all-electric solutions will increasingly sell themselves thanks to forces like fuel efficiency regulations and increasingly favorable economics.
Still, adoption of electric trucking technology is likely to be fragmented at first. Ports where drayage trucks currently spend a lot of time idling, contributing significantly to industry emissions, are one obvious jumping off point. California, with its additional CARB regulations, is another natural market.
Across the board, Class 8 truck sales have steadily increased, signaling that fleet owners are already upgrading and expanding their fleets. Whether electric trucks can draft off those headwinds will largely depend on if manufacturers can get to market during the current buy cycle. It’s a scenario that may particularly benefit companies offering intermediate solutions, like Hylion, which converts a traditional tractor trailer into a hybrid.
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