Technology is rapidly starting to play an essential role in the trucking industry. Many events, like the Autonomous and Electric Truck Vehicle Summit, aim to gather together the major players and innovators in the field for a series of panel discussions about the future growth opportunities of the trucking business.
The trucking industry in the US transports the majority of domestic overload freight. The sector was valued at $791.7 billion in 2019 alone. Furthermore, according to the data gathered in 2022, the number of truck drivers in the country is around 902,000. These metrics truly showcase how big the trucking market is already. However, the growth of the industry has not slowed down since 2019. 80% of American businesses depend on trucking companies for the everyday delivery of goods and some other operations. Therefore, the industry has massive growth potential and even a shortage of drivers due to excessive demand.
It may sound very tempting now to open a trucking company, however, there are many challenges in this industry as well. Moving forward, we have discussed every detail that you need to know before starting in the trucking industry: either as a driver or as an entrepreneur.
History of the Trucking Industry
To give a little bit of historical background, let’s go back to the 20th century. In the 1900s, the impact the trucking industry had on the overall economics of the US started to grow. However, in the 1900s, trucks were essentially motorized wagons. It is also important to note that those trucks had rubber tires, which made the trips too rough and slow. In response to this, in 1916 the Seattle Chamber of Commerce financed a trip of one truck driver from Seattle to New York. This initiative allowed trucking industry stakeholders to discover that highways would play a significant role in improving the efficiency of trucks.
The history of the trucking industry took a turn in 1956 when the Federal-Aid Highway Act came into effect. This act authorized building a 41,000-mile system of interstate highways, which had a $26-billion approved budget plan. Nowadays, one of the fastest growing industries in the US market is trucking, with a huge amount of work opportunities for drivers and many other professionals. And AJR Trucking has a significant role in the US trucking industry due to its commitment to hiring the best staff to ensure the best customer service.
Current Trends in the Trucking Industry
Before getting into the current market trends of the trucking industry, it is important to understand some of the rules and regulations that trucking companies need to follow. For example, there are several state and federal certificates and permits that need to be acquired before the operations of the company start. Additionally, drivers need to have a Commercial Driver’s License (CDLs) in all cases and a HazMat (Hazardous Materials) permit if they drive trucks that carry dangerous goods.
Recent industry news states that trucking accounts for 84% of the total revenue of the transport sector. However, the massive size of the industry comes with additional regulations that need to be followed. For example, trucks are banned from driving on certain streets due to potential harm that they may cause to the general public.
Recently one of the major trends in the trucking industry is the growing demand for local truck drivers. This particular position is growing in popularity because the commutes are shorter, working hours are more flexible, and give drivers the opportunity to be home more often.
Another growing trend in the trucking industry is the implementation of eco-friendly practices. The increasing amount of trucks increases greenhouse gas emissions even more. Therefore, some trucking companies, including AJR Trucking, have started integrating more sustainable practices in their operations, such as using electric vehicles and reducing the emissions of air pollutants.
Another novel trend in the industry is team truck driving. This method involves two different drivers taking turns behind the wheel. This allows the truck to be on the road for longer periods of time while one person drives and the other catches up on sleep.
In addition to the current trucking industry trends, we find it essential to mention some of the existing challenges as well. The driver shortage is the first major issue in the trucking market in the US, as many drivers started to leave their jobs for various reasons, including COVID-19, the rising number of self-driving trucks, etc. Another major issue that needs to be addressed is the security of the valuable goods that are being transported. Some of the dangers include, but are not limited to distracted driving, trucks malfunctioning, some road crimes, etc.
Establishing a Trucking Company in the US: A Complete Guide
With the growing demand for trucking companies, you may start wondering about how to start a trucking business of your own. Here are some important things that you need to know before opening your own company.
First of all, you should start with your trucking company business plan. However, before writing the business plan, there is a need to gain information about some key points of consideration, such as the difference between spot market and contract market rates, calculation of costs, including fuel, maintenance, etc.
A typical trucking company business plan would consist of an executive summary, which gives an overview of the company’s operations, main target markets, inner communication means, and many other essential parts of the business. After the executive summary is stated, the company description, operations, services, market analysis, sales, and marketing strategies, and financial projections need to be detailed.
After the business plan is complete and the whole image of the company is more clear, then it’s time to acquire licenses and certifications.
First of all, all drivers need to hold a Commercial Driver’s License granted by the Federal Motor Carrier Safety Administration (FMCSA). The second important licensing requirement is getting a trucking authority, which is permission given by the government to get paid to transport freight. After the licensing is completed, there is a need to get insurance for the trucks, open a company bank account and get financing, if applicable.
Besides describing the steps of creating a business plan for a trucking company, it is important to mention the mechanism of the trucking industry in general as well. Trucking is generally listed as a service industry, and its most important characteristic is meticulous planning. Especially large corporations, that deal with a lot of freight deliveries and long commutes, need to handle the management of all operations as efficiently as possible to avoid issues on the road. Furthermore, the operations of the trucking company do not solely depend on the drivers and their direct managers. Operations managers are one of the most important parts of the company, who ensure fast, smooth communication between the team members, as well as with the contacts outside the company.
Lastly, the best trucking companies do not only succeed because they do everything in a detailed and correct manner, but their success heavily depends on the passion they have for the trucking industry in general, as well as the teamwork inside the company. Top trucking companies, like AJR Trucking, have strong employee appreciation programs to ensure satisfaction and gratification for each employee of the company, no matter their position.
Future Trends of the Trucking Industry
According to the American Trucking Association’s US Freight Transportation forecast, the freight trucking industry will undergo a 24% increase in 2022. This will also account for a 67% of revenue increase for the trucking industry in general. That being said, many opportunities arise in the industry for the growth of different sectors.
One of them is the involvement of women in the workforce. With the rising number of female drivers in general, many of them are drawn to work in a trucking company for various reasons. Some of the most common ones are safer working conditions and opportunities for creating solid living conditions due to higher pay rates. Furthermore, the best trucking companies already started hiring more women, because of the many benefits that female drivers bring to the industry. First of all, according to statistics, women drive more safely than men. The American Transportation Research Institute (ATRI) found out that men are 88% more likely to engage in careless and reckless driving than women. Additionally, many NGOs started to educate women about different career opportunities in the trucking industry, which also fostered the growth of the number of female truck drivers.
Another important future trend is the growing importance of sustainability in the industry. California’s latest regulation states that by 2045 all heavy and medium-duty trucks should be zero-emission vehicles. Therefore, major changes in the types of trucks used in the industry should be expected in the near future.
Last, but not least, as in almost all industries, the future of the trucking industry is also being greatly influenced by technological advancements. One area of operations that is being changed in many trucking businesses is the integration of machine learning to reduce the time spent on several tasks that could be performed by the computer. The extra time acquired will give the trucking companies the opportunity to concentrate more on supporting their drivers as well as managing customer relationships more effectively. Looking even further, artificial intelligence and machine learning already give the opportunity to control and drive trucks without the human factor involved. Therefore, this is another major trend to look out for and try to keep up with in the future.
Whether you are looking for a truck driver job or want to open your own business in the trucking industry, it is essential to research some of the best trucking companies and understand their strategies. AJR Trucking is a company to look up to, especially for its great reputation, long-term partnership with USPS, integration of sustainability practices, strong employee appreciation program, and the ability to keep up with the latest market trends and act upon them.
By keeping up with the latest trucking news, you will surely learn more about the industry insights that will help you stand out from the competition. Companies like AJR Trucking are true innovators worth following.