By JULIA MILLER
Today there are innumerable ways to buy goods, and more and more consumers are turning online. This change is prompting the freighting industry to re-evaluate its model.
Over the next 30 years, the U.S. Department of Transportation forecasts a 40 percent increase in the market, a statistic that Mississippi Trucking Association President Hal Miller reinforces.
“We’re looking at a 3 percent growth rate per year,” Miller affirmed, explaining that adds up to the US DOT’s number.
But the problem isn’t a future one. The impact has already taken effect.
“Our industry has been dealing with a significant shortage,” he said. “There’s a 30,000 to 40,000 shortage (in personnel) nationally.”
By 2022, just five years from now, that shortage is expected to jump to between 180,000 and 225,000.
“This could mean a significant impact in the way the economy flows,” he said. “Seventy-five percent of products have got to go solely by truck.”
The issue is not solely based in the amount of goods being shipped but also the increase in destinations. In the past, Miller said a truck would be loaded down to maximum capacity and drive to Wal-Mart once a week. Now, with companies like Amazon on the rise, the goods are being dropped directly at homes. The result is not only more deliveries, but an inefficiency caused by trucks not being full.
“The whole dynamic is changing,” he said.
The trucking industry’s approach to the dilemma is three-fold. It must increase in intermodal transportation, improve recruitment practices and address infrastructure.
Intermodal transportation is when products move by some combination of road, rail, air and water. Mostly, Miller said they are partnering with rail industries to improve the efficiency of their intermodal systems.
“How can we work together to solve these problems?” he said. “We used to not like each other. Now we have to work together.”
Recruitment is an integral part of their plan. Truckers are working to attract more drivers, and they are doing it with pay increases and better benefits. They also are working to make sure trucks are loaded down with technologies, such as anti-collision systems, to improve the quality of driving.
Miller, who says he was born into the industry with a trucking father and grandfather, said some of the biggest industry changes have been some of these technology improvements, especially in regards to safety. The trucks are able to connect with each other and caravan in a way to help eliminate human error.
“Hop into any brand-new car, and anything you see in there is in these trucks,” he said. “In 1984, most didn’t have A/C, power steering, if there was a radio it was AM. Now you get in one, and it’s just short of a spaceship.”
An improvement in infrastructure can make the whole system flow better because congestion costs the trucking industry a lot of money. Each year, more than 996 million hours are wasted by truck drivers trapped in congestion. This equates to the workload of approximately 362,000 drivers.
For the most part, funding for roads comes from gas taxes. Many industries in Mississippi, particularly the Mississippi Economic Council, have spent the last few years pushing for a increase on the basis that as vehicles become more fuel efficient less money is raised to support the roads. As for now, all efforts at the state level have failed. The Mississippi Department of Transportation spokesman Jarrod Ravencraft said most of the freight traffic impacts the interstate system in Mississippi.
“It is MDOT’s priority to ensure all state maintained freight corridors run are efficiently to facilitate future truck freight movements, he said. “MDOT has worked to ensure maximum flexibility with freight funding by meeting several new federal requirements.”
These requirements include the development of a FAST (Fixing America’s Surface Transportation) Act compliant statewide freight plan; establishment of a freight advisory committee; designation of Critical Urban Freight Corridors in coordination with Metropolitan Planning Organizations; and designation of Critical Rural Freight Corridor.
President Donald Trump said in May that he’d consider a federal hike in the gas tax to fund his own $1 trillion infrastructure package. The federal gas tax has not been increased since 1993.
What does that mean for the consumer? Miller said freighting costs could increase in the future, but he does not anticipate a drastic change. While the way products move may change, the individual consumer isn’t likely to notice.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info