2020 has brought unprecedented times of impact, change, and dire economic fluctuation. Industries have faced economic implications and the trucking industry is no exception. However, the adoption of technology has helped keep businesses around the world going.
Industries are experiencing rapid growth owing to this adoption of technology. The US trucking industry market is estimated at $1.1 Trillion and will grow at 4% CAGR in the next 7 years.1 Let’s see what are the factors contributing to truckers’ growth.
1. Market Capsizing
The trucking industry faced a shortfall in the movement of goods in the initial months of the pandemic. Several trucking companies have shut shop due to the receding market conditions.
2021 could bring about growth contrary to the decline that began in 2019. New developments will boost the trucking market keeping small size trucking companies afloat.
2. Urbanization Expanding Avenues
In the past decade, most rural areas were converted to urban landscapes. This will increase post-pandemic meaning more urban landscape for truckers to drive through.
Urbanization gives truckers more places to traverse, widening their scope and services to a wide customer base. Rural areas may get access to all necessities that urban spaces have. This helps companies expand and generate more business in the process.
3. Incorporating Data Analytics
Businesses globally use data analytics to function, grow, and measure efficiency impacting business. The trucking industry is slowly incorporating data analytics for vehicles on the road. In 2021, more trucking companies will embrace data analytics coupled with technology.
Several trucks are being developed with technology that can send real-time information about the route or any delay the truck driver is facing. Such real-time information can help identify glitches and make trucking operations efficient.
4. Rise of e-Commerce
The influence of e-commerce is evident globally in all industries. In the last few years, digital transformation has been growing at a rapid rate. The pandemic has catapulted this growth rate multifold. It has pushed people to become convenient with e-commerce from the comfort of their homes.
A rise in e-commerce means a rise in the trucking industry too. The more people order online, the more businesses would need trucking services. Truck drivers help deliver raw materials to production houses and finished products to customers. The e-commerce trend is most likely here to stay and even grow further in 2021.
5. Regulatory Changes
In March 2020, the FMCSA waived off driver-hours-of-service limits. These apply for commercial carriers transporting emergency relief supplies or essential goods. This came as a result of the unending pandemic.
COVID-19 has driven both state and federal governments to bring regulatory changes in the trucking industry. According to Bart De Muynck, research vice president at Gartner, regulators may open up to newer technologies such as drones and autonomous vehicles in the long run.
6. Influence of Supply Chain
Post-pandemic, the supply and demand shock that began in February 2020 is bound to show its impact. This ordinance has helped companies identify vulnerabilities in production strategies.
While more companies will look into setting up production in home countries, there are several products for which raw materials are cheaper when imported. Import and export is expected to rise and bring more business to the supply chain industry.
An increase in supply chain business requires the trucking industry's support. This means more work for truck drivers. Statistical data shows there is an ever-growing demand for truck drivers. It would take at least 900,000 truck drivers to fill the growing demand gap.
Truck drivers transport almost 70% of the goods in the country. This is not going to decrease rather increase in the coming year. All the above developments will alter the way truckers function in 2021 adding to industrial growth.
Sources also state a driver pay rise in 2021 as companies face the demand shock when COVD-19 took the world by a storm.5 So all you truckers out there, stay put and watch these long-term trends bring growth in the coming year.