What Is the Future of Trucking?

How will COVID-19 affect trucking and truck drivers over the long term? This is a deep subject and before I get into it, I want to offer a huge thank you to all truck drivers and all the frontline workers!

What is trucking going to look like six months from now? Or in 12 months?
A fascinating question and as I am writing this article, the COVID-19 restrictions are just starting to be lifted throughout the country. Stores are beginning to open and golf courses too… yes, golf is back. These are a few indications that life is returning to normal. But what is in store for trucking?

I see many struggles ahead for trucking companies. Last April (2019), trucking companies ordered 15,000 new trailers. This year, they ordered 300 — and the record low is a chilling sign for the consumer economy (info source is FTR). If trucking companies are ordering less equipment, it shows that they forecast that retailers and manufacturers will need to move fewer goods in the coming months.

Before the pandemic, freight rates were not healthy. And during the pandemic crisis, freight rates crashed as trucking company owners tried to keep their doors open and keep their trucks moving. They did this by lowering their prices as a reaction to the demand for vehicles & freight rates plunged into what seemed to be a bottomless pit. The freight that was available allowed the shippers to take advantage of the low rates. One conclusion from this is if the trucking company that you are working for was not healthy before this pandemic, what hope does it have coming out of this crisis? Will your company survive? I know that here in Canada, there are many government incentives and loans to help struggling companies get through this. But if trucking companies were not in a strong financial position before this situation that has weakened every company, then how are companies going to survive? I suspect that many trucking companies are going to fail. Companies that were not well managed with good financials may not make it through. So as a driver, watch for the signs. You do not want to be owed large sums of money if your company goes under.

How are the Owner Operator’s doing throughout these unusual circumstances? I think that depends on the company that the Owner Operator is contracted to. Is it 100% Owner Operator? If it is, then you are likely better off than working for a company with a mix of company trucks and Owner Operator units. This is because, in most cases, the company tries to keep the company trucks moving first and then looks to the Owner Operator to pick up the rest. In many of these hybrid organizations, this is a matter of survival. They do what is right for the company and unfortunately, let the Owner Operator suffer. I have long believed that an Owner Operator is better off working for companies that are 100% Owner Operator and not hybrid organizations.

The same word of caution goes out to the Owner Operators. Do not let payments due to you from the company fall behind. You need to stay on top of this and if money is due to you and not being paid promptly, then perhaps it is time to park the truck.

What will happen to company drivers in the next six months? Almost everything said above applies to you too. The situation is dire for many companies. Watch for signs that your company is struggling more than others. Fuel cards being declined is often one of the first signals that your company is in trouble.

Well, so far this has been a morbid and depressing article. But as always in life, there is light at the end of this dark tunnel. I do believe that we are in for a period of struggle wherein the weak companies will not survive. BUT trucking is an “essential” service and it will rebound… long term, we are in for a trucking boom. Due to the shrinking trucking capacity, freight rates will go up and drivers will get raises.

Yup, I think that you are in for a raise. But we must get through this crisis first. It may get worse before it gets better, with our political leaders telling us a second wave will hit us in September, but ultimately, it will get better and I for one, think very much better. I am convinced that it will be fun again to be a truck driver and a trucking company owner. That light at the end of the tunnel is bright, healthy, and exciting. We all must just tighten our belts and get there.

What should you do in the meantime because of this new normal? Wash your hands; sanitize your cab; wear a face mask when you cannot socially distance and wear disposable gloves when you must deal with high touch surfaces. Watch for signs that your company is in trouble and if symptoms appear, then weigh your options. Some companies are still recruiting drivers and Owner Operators throughout this situation, all the companies featured here in Over the Road are currently hiring so take a look. And be ready for change because change might be just around the next curve.

In the meantime, drive safe, stay healthy and remember the handshake is dead.

Chris Harris
Top Dawg, Safety Dawg Inc.
905-973-7056
chris@safetydawg.com
@safety_dawg (twitter)