The trucking industry in the United States has faced multiple challenges over the last few years. Rising fuel costs, increasing insurance claims and driver shortages are just a few things that have impacted the trucking economy. The forecast for 2023 shows that many of these issues and others will continue to affect the trucking industry.
Some trends, such as the growing use of technology and shifting consumer spending habits, are permanently changing the freight industry. Learn more about what is going on with the U.S. trucking industry in our trucking forecast for 2023.
Several economic and labor-related issues have started affecting the trucking market over the last couple of years. In 2023, these issues will continue impacting trucking companies or become even more considerable challenges for the market.
These are some most significant issues facing the trucking economy in 2023:
The passing of California's Assembly Bill 5 is changing the industry's view of independent contractors. Assembly Bill 5 states that anyone who provides labor or services in exchange for payment should be considered an employee rather than an independent contractor. The only time workers can be regarded as independent contractors is if they meet three criteria:
Truck drivers are seen as employees according to the bill, as delivering cargo is the usual business of the trucking and transport industries. Other states may follow in California's footsteps and adopt similar regulations governing independent contractors and employees. These bills can affect how transport companies work, as employees and independent contractors are covered differently by labor laws.
A report by the American Transport Research Institute (ATRI) states that insurance premiums rose by 47% from 2009 to 2018 in response to the higher litigation payouts for accidents involving transport vehicles of any kind.
As insurance premiums increase to cover rising payout and litigation costs, transport companies of all sizes face financial uncertainty. The continued threat of theft and increasing cost of commodities, labor and repairs, medical treatment and litigation fees are also likely to affect insurance premiums.
The American Trucking Association (ATA) claims that the trucking industry may be short 160,000 drivers by 2030 unless action is taken. This has led to driver pay increasing as companies seek to attract and retain drivers. In 2023, the driver shortage issue is expected to become more prevalent as demand for goods increases and the aging workforce looks to retire.
The COVID-19 pandemic created a semi-truck shortage. Pressure continues to be placed on labor markets worldwide, including in the U.S., resulting in lower manufacturing rates. Combined with global supply chain congestion, this pressure has resulted in fewer new trucks available on the market. As a knock-on effect, fewer used trucks and equipment are up for sale as companies cannot upgrade fleets.
The fuel cost is set to increase in 2023, with Brent crude oil expected to reach $92.36 per barrel, nearly $20 dollars more than in 2021. The retail price of gasoline may reach a high of $3.51 a gallon. While this is lower than the $3.99 a gallon in 2022, fuel expenses are likely to rise, affecting transport operations across the country.
A few trends will impact the freight market in 2023 on top of the labor and economic issues the sector faces. Some of these trends include:
Knowing what issues the transport industry faces and some significant trends can help freight companies prepare for the year's risks and opportunities and help your company weather the ups and downs. The biggest step you can take toward proactive action is streamlining your business and finding ways to reduce costs without impacting service delivery and driver safety.
One of the best ways to do this is by embracing technology. Fleet management software can help you monitor driver behavior, analyze fuel usage and implement effective preventive maintenance schedules. Toll management solutions are an effective tool that can make managing paying tolls easier and cheaper.
Using one system lets you manage all toll payment needs in one place, reducing the amount of admin for drivers, fleet managers and the accounting team. It can also reduce the number of costly violations resulting from unpaid tolls, making inter-regional trade easier and preserving crucial route information. Using a transponder and a toll pass solution can help drivers get through tolls quicker, easing congestion and helping them deliver goods on time.
The 2023 freight market forecast has highlighted issues impacting the industry. It has also shown how technology can assist trucking companies by lowering costs and helping to improve performance through data insights and automated tasks.
For over 20 years, Bestpass has been trusted by fleets and tolling authorities to provide comprehensive toll management solutions that simplify toll payments for all parties.
Our toll management platform is a one-stop solution that can save you time and money by managing toll payments, handling disputes and providing you with essential tolling data.