Challenges Faced By Trucking Companies
There are a variety of challenges facing trucking companies today. They are, but not restricted to, higher operating costs, increased regulation, and a slower than expected economic recovery.
Fuel prices recently have been very volatile recently. A research done by the Department of Energy has shown that, on average, diesel prices have increased by seventy three cents per gallon which represents a twenty three percent increase. This is a major challenge as fuel surcharges do not cover this increase.
The solutions that have been suggested by the affected companies include the better management of idle time and truck speeds. Also suggested was investment in more fuel efficient trucks in order to improve the miles per gallon ratio. Another solution is for the companies to use fuel hedges from time to time in order to minimize exposure to the rapid increase of fuel prices. Finally it was recommended that companies should form partnerships with clients in order to develop better fuel surcharge programs.
The other major challenge is the increasing number of regulations subjected to the industry by the federal government. In the case of the Federal Motor Carrier Safety Administration CSA program, there are several disparities among different regions. Most companies find themselves scoring higher on some regions which they have only serviced for a week or so. This is a problem because these scores are included during the shippers’ freight contract bidding process.
Additionally, it is yet to be seen how the reduction of driver hours due to HOS legislation changes will impact the bottom line for both companies and drivers.
Although there have been several positive developments, the state of the American economy is still bad. This affects the trucking companies in that, most small businesses do not make enough sales regularly to order more goods, which translates to more work for the trucking industry. There is no major respite in sight as the recent projections suggest that the United States Of America Economy will continue to crawl.