Ryan Butler - Trucking Business Startup

In the trucking industry, companies provide shipping services using tractor trailers, to their customers, who are usually involved in commercialization of certain goods. The trucking industry is the backbone for the transportation of commercial goods from one point to the other, and without it, transit of goods would be very complicated and more expensive (Mack, n.d.). Goods are transported from the airports, rail yards, and ports to their final destinations by trucks. For commercial companies, collaborating with trucking companies concerning the delivery of their goods is best because the transport costs are lower as compared to using air transport.

The trucking industry can be used as an indicator to assess the economic growth of a country. The growth of most economies highly depends on the commercialization of goods and services. Since most of these commercialized goods are transported by trucking companies, the changes in the trucking industry can be used to interpret the growth or decline of a countrys economy. For example, if the trucking business sedates, it implies that the transportation of goods takes place at a slower pace. This can be interpreted to imply a fall in the commercialization of goods in the country, which, in turn, affects the countrys economy.

It is explicit that the year 2020 was not one of the best for the trucking industry, as business significantly slowed down. This is partly due to the Coronavirus disease (COVID-19) pandemic that affected commercial businesses throughout the globe. Many countries went into national lockdowns, which involved shutting down businesses except for those that offered essential services such as hospitals and pharmaceutical companies. This highly affected the companies that focused on transporting non-essential goods and raw materials for manufacturing other goods, other than sanitizers, groceries, and cleaning products, for example. When commercialization of goods downtrends, then the trucking industry is automatically affected because their customer base is also affected.

Even before the idea that there would be COVID-19, experts had already projected that 2020 was going to be a tough year in the trucking industry (Cannon, 2019). By then, the projected retardation of business in the trucking industry was attributed to increased tariffs that suppressed economic growth, especially in the United States (U.S.).

Some experts suggest that 2021 is more likely to be better than 2020 because most economies are beginning to bounce back and restabilize from the harsh effects of the COVID-19 pandemic (Deresh, 2020). It is, therefore, forecasted that both shipper demand and freight volumes will rise in 2021 as economies improve. As commercialization of goods and services surges up again, shippers will require more services from the truckers. As freight volumes increase, there will be more work for companies in the trucking business. Therefore, these predictions present the trucking business as a possibly lucrative business to engage in at the moment.

The Heavy Duty Trucking Staff (2021) predict that payments for drivers will increase because of the reduced numbers of currently available drivers in the trucking industry. The lower number of available drivers is mainly due to the pandemic that hindered prospective drivers from enrolling for commercial driver training and licensing programs. This could even get worse due to government stimulus dollars that would result in more people having more cash to spend at their disposal. This scenario could even prevent drivers who took a break in response to the COVID-19 pandemic from coming back.

It is expected that transportation of vaccines, among other goods, will be core in many countries during the first half of 2021. As more people get access to the vaccines, it is predicted that the spread of the COVID-19 pandemic is more likely to slacken. Although people will continue to use online services for buying some goods, it is more likely that some will revert to the physical form of buying, which might be more convenient for some goods. Simply said, the trucking business has a promising future, especially during the second half of the year 2021 (Heavy Duty Trucking Staff, 2021).

The US Express predicted an 8-15% rise in contract rates during 2021 (Carmony, 2021). This is due to the collaborative effects of fewer drivers, overall reduced capacity, and increased freight demand. Spot rates are also expected to rise, especially during the peak seasons of the holidays, toward the end of the year.

Like any other industry, the trucking business has underlying factors that determine its progress or failure. Here are some of the factors that either individually or collaboratively affect the trucking industry:

Market Fluctuations: As mentioned earlier, the trends in the economic markets usually correlates with trucking business trends. This means that when economies are stable, the trucking business rises and becomes more profitable. The opposite is also true.

Regulations: The trucking industry is highly regulated by laws to ensure its efficiency, safety, and authenticity. The ease at which business can be done in the trucking industry might also depend on the laws and regulations that exist in any country. Laws and regulations may even become a hindrance to business, especially for cross-border truckers, as they might have to deal with regulations of different countries. Sometimes, truckers may have to incur delays due to verification processes that are in line with freight laws. Overall, laws and regulations protect the trucking company, shippers, and indirectly, the end users of the products in transit.