Trucking’s Optimistic 2021 Outlook

Even for the most experienced drivers, a seemingly simple right hand can turn dicey in a hurry. If a driver turns too wide, he or she can end up colliding with cars in the left lane and causing accidents. Meanwhile, if the turn is initiated too early, vehicles in inside lanes can get squeezed as the driver finishes the turn.

Like making a 90-degree right hand turn, trucking is initiating it’s turn from “COVID-19 Street” on to “2021 Boulevard” and it’s going to be tricky. With tightening capacity, hoped-for rising rates will help the industry to clear the corner, but given the regulatory climate and economic uncertainties, this turn may be problematic.

Despite the possibility of collisions ahead, much of the industry is optimistic – buoyed partly by the essential role trucking has always had enabling the entire vaccine supply chain to operate. It is not hyperbole, and because trucking is delivering the cure, right now, it is likely mass vaccine delivery will support hopes that the economy is rebounding with a sharp “V.”

Industry leaders are optimistic for a better year despite some challenges. Shannon Newton, President of the Arkansas Trucking Association, said trucking will have no shortage of challenges in 2021 as it delivers the COVID-19 vaccines, which she said are, “expected to lead to some sense of American normalcy.” Newton reminded media that truck drivers are the ones delivering the goods that help communities recover after storms and natural disasters, “Amid the COVID-19 pandemic, the industry delivered the goods people needed to shelter in place.” Noting that with widespread access to a vaccine that trucking is enabling, the world just might get back to normal.

Doug Voss, Arkansas Highway Commission Endowed Chair at the University of Central Arkansas foresees 2021 as a “good” year for carriers amid high freight rates. “Spot rates in 2020 sometimes were higher than 2018 levels,” reports Talkbusiness.net. “Compared to 2019, diesel prices declined by about 18%, while revenue per shipment increased by about 0.6%.”

Overall, Voss projects 2021 will be a better year than 2020 for trucking, however, he cautioned rising insurance costs and driver wages have and will continue to cut into earnings which is why executing the “turn” will be very challenging for the industry in 2021 -- because it’s getting tighter. Voss explained that while there never been a perfect year for trucking, the good often offsets the bad. He noted that carriers will have to increase driver pay and attract more good drivers for example. 

The challenge for the industry has always been how to ramp up operations amid rising freight demand without breaking the bank. Rapid expansion of operations is probably the toughest business challenge of them all.

Access to drivers will continue to be tough, but better pay scales and newer trucks should help, however that will be expensive. So, too, will insuring a growing fleet. As far as insurance premium control and compliant coverage is concerned, we recommend engaging your underwriter to help manage those costs—and find affordable truck insurance that helps keep operations growing to meet demand.

For most of the industry, navigating this corner correctly is going to take experience, support from vendors and an acute focus on operational fundamentals and cost control. To learn more or for a review of your insurance and safety programs, contact our team of transportation specialists.

Source: https://talkbusiness.net/2021/01/2021-should-be-better-year-for-trucking-industry/