Every item that we touch and purchase at our local store had a complex and intricately mapped-out journey before it made it to the shelf. This intricate journey was planned and executed by experts and professionals in the transportation and logistics industry. With all the essential goods that this industry is responsible for safely delivering, it’s important to recognize that the transportation and logistics industry is the backbone of our country.
The transportation industry has many different modes by which it transports goods, but the trucking sector of the transportation and logistics industry is the most important. That’s because, according to the American Trucking Association, these commercial vehicles transport over 72% of all of the country’s freight tonnage.
If you are in the industry, or if you’re looking to enter or learn more about the industry, you must recognize the importance of staying up-to-date with industry trends. The transportation and logistics industry is fast-paced and there is a lot of variability that cannot be controlled as goods are transported between manufacturers and consumers. For suppliers and logistics managers to stay effective and efficient at successfully transporting the country’s freight tonnage, they must be aware of all the newest trends and topics.
To help you stay up-to-date, COOP is proud to bring you the top 3 Transport Industry Trends of 2022, spanning across all facets of the industry.
Trend 1: High Trailer Demand
The first trend we’ll start with happens to be great news for those who have idle and available trailers. In 2022, one of the most prominent trends we’ll see in the industry is the continued high demand of trailers to transport freight.
The industry trend of increased trailer demand goes hand-in-hand with the increased demand for consumer goods. However, in 2022, not only will demand for consumer goods remain high, the means by which individuals purchase these goods will increasingly lean towards online shopping with home delivery.
This stems from the lifestyle shift brought on in the 2020 COVID-19 pandemic. In order to survive, many local businesses had to find trailers and other commercial vehicles to help them transport their goods directly to the homes of their customers. Otherwise, they weren’t able to stay afloat in the face of pandemic-induced lockdowns.
Now, in 2022, many consumers have found themselves enjoying the convenience of at-home delivery, and many businesses have even permanently shifted parts of their workforce to some kind of hybrid or work-from-home environment, meaning that this demand for trailers and commercial vehicles will continue as these circumstances result in more and more individuals ordering their products online or opting to get delivery from the local brick and mortar stores.
The trailer manufacturing industry has responded to this trend by increasing their production of trailers by a compound annual growth rate, or CAGR, of 5.3% to an anticipated industry valuation of 41 billion dollars by 2026. But despite increased capacity, there are physical limitations to how many more trailers can be built quickly enough to meet consumer demand. Thus, renting existing trailers that are idle to other trusted businesses looking to make deliveries is a great opportunity for the owner of the idle trailer to respond to this trend in a fiscally smart way.
Trend 2: Effects of Commercial Vehicle Manufacturing Lag
Despite the increased production of commercial trailers, the commercial vehicle manufacturing industry is sensitive to the supply of goods and raw materials that go into creating their products. COVID-19 resulted in many closures and labor shortages from individuals who feared catching the virus, and this meant that many of the raw materials that trailer manufacturers were trying to purchase weren’t readily available.
This affected costs and forced manufacturers to raise the prices of their products, causing many of the newly manufactured trailers, and all existing trailers, to have higher sale and resale values. This will continue to remain a trend in 2022 as the supply chain still struggles to rebalance itself from the initial shock of 2020’s pandemic measures.
But if you do find yourself affected by a shortage of the trailers and commercial vehicles you need to complete your work, you can always rent one on a commercial vehicle sharing app like COOP. Likewise, if you have too many idle trailers because of low demand due to your industry’s seasonality, you can allow your trailer to be rented on the platform by other trusted local businesses looking to deliver their cargo to consumers, while continuing to make money for yourself.
But once a professional in the industry tackles these conversations related to commercial vehicles, there’s another trend they need to address which has made meeting the demand in this field difficult.
Trend 3: Continued Commercial Vehicle Driver Shortage in 2022
The commercial truck driver shortage is not a new concept. First introduced to the public in a 2005 report, the commercial truck driver shortage continues to rage on in the industry. But why is the driver shortage still a problem in 2022?
For starters, the driver shortage was already an issue before the pandemic. Long hours, paired with inefficiencies, lower pay than expected, and lack of benefits and steadiness in the industry has driven many people to consider exiting trucking altogether.
Additionally, the industry has a hard time recruiting due to roadblocks such as the age requirement for drivers to cross state lines (which is 21 instead of 18), low representation of women drivers (which was last cited as women making up 7% of truck drivers in 2021), and drug test requirements for drivers even as an increasing number of states legalize the recreational use of marijuana. Additionally, the industry’s current drivers are aging out into their retirements.
On top of this, the COVID-19 pandemic caused many driving schools to be closed in 2020, resulting in fewer drivers coming out into the workforce for 2021, something that will continue to be felt in 2022.
All of this is going to culminate in the projected driver shortage in 2022 of approximately 80,000 drivers. This means that there are 80,000 fewer drivers than needed to meet the freight demand of the trucking and logistics industry. This is especially true for the segment of the trucking industry that focuses on long-haul, coast-to-coast, or over-the-road transportation. And it’s only projected to get worse, with industry experts estimating that the driver shortage will increase to surpass 160,000 drivers by 2030.
Many businesses can consider retention efforts and incentives, as well as CDL training programs to build a pipeline of talent and retain their current drivers. But, while they do this, if they have any vehicles that are unused due to the driver shortage, Coop provides a fantastic platform for renting those idle vehicles out to help others address supply issues with commercial vehicles, and make money as they train a new pipeline.
COVID-19 Changing the Landscape
As we’ve alluded to in the top 3 trends listed above, COVID-19 has drastically changed our society, and the logistics and transportation industry has been no exception. The effects are most strongly felt by the imbalance of supply and demand for players in the industry.
Demand for delivered goods has never been as high as it is now that consumer behavior has shifted due to more people staying at home because of the pandemic. This paired with the shortages of supply and labor has pushed this market to have to be more creative.
But one of the longest-lasting impacts is how the pandemic led to a record high of an already existing issue: the commercial vehicle driver shortage. This has led to increased wages to try and attract and retain talent, increased costs of materials, and tighter margins that have resulted in higher costs passed onto consumers, as seen with the increase in CPI or inflation rate being 6.8% at the end of 2021.
This has made many consider what options they have to help find efficiencies in the system, and have these inefficiencies addressed to continue to contribute to their top and bottom line.
Fleet Flexibility is the Best Way Forward
With the variability and volatility of the logistics and trucking industry, especially in the face of new challenges and trends presented by the COVID-19 pandemic, professionals in the logistics and transportation industry in 2022 must be flexible and forward-thinking to continue to survive and grow their top line. So it is on these professionals to best manage and balance the inefficiencies in their business’s supply and demand factors.
For example, if seasonality causes lower demand for one business’s vehicles, or if a business does not have the drivers it needs to utilize their entire fleet, they can help optimize their top line by renting those vehicles through the commercial vehicle-sharing platform COOP. With the ability to make 4 figures monthly on each vehicle they have up for rent, businesses can easily use this money to cover any costs associated with the maintenance of their vehicles, and invest in innovative training programs or driver incentives to help address some of these vehicle trends.