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The Trucking Dilemma

2019 has been a challenging year for truck drivers and their employers.  According to Broughton Capital LLC, a transportation data company, recent reports indicate that close to 650 trucking fleets shut down in the first half of the year, compared with 175 closings during the first six months of 2018.   This ranges from small fleets to even some of the larger fleets in the country.  So, what does this mean for the future of the trucking industry?

CEO of Roadmaster Group, John Wilbur, hates to see companies shut their doors and jobs being lost, just as any of us do.  However, being the straight shooter that he is, Wilbur did not hold back when expressing his thoughts and concerns, and even shed some light on many current issues in the trucking industry.  In a recent interview with Fleet Owner, Wilbur expressed these thoughts and concerns and how the recent closures throughout 2019 will affect the future.

“I need to be careful, but I see it as healthy,” he said. “We just don’t have enough barrier entry to this industry at the general freight level, and there’s too much capacity at times. So I find it’s a cleansing process. I mean, you hate to see anyone go out of business and people lose their jobs. Some companies are in the market when they shouldn’t be, then they tend to mess up, get desperate with pricing, and it messes up the market until they go away. So, it’s just a natural part of the industry cycle and how we get healthy again.”

While these reports have resulted in fear of the industry’s downfall, Wilbur believes these rumblings to be blown out of proportion.

“2019 would feel a lot better if it wasn’t for 2018,” he said. “2018 was such a barn burner of a year for the entire industry, and everybody has short memories. But if you could theoretically remove 2018 and stack 2019 up against 2017, ‘16, ’15 and ’14, it looks pretty good. So I would start from that perspective.”

So, if we start looking at things from a different perspective, what exactly does that mean for the future?

“I look at 2020 as a little bit more of the same pace that we’re seeing here in 2019. I think the good news from a trucking standpoint is that capacity might tighten up a little bit, which then manifests itself in pricing. If you really look at the industry structure, it doesn’t have a lot of barriers to entry.”

With low barrier entries, comes more issues when weaker players get into the market and stay in longer than they should.  And, unfortunately, that is exactly what we are seeing today and may see more of in the future, in terms of weaker players being pushed out of the market. 

“I look at 2020 from the macro view, and say load volume will probably be flat to up a bit, and capacity may tighten a little bit, so you may have some price support.”

With companies entering and dropping out of the market comes job loss.   This brings up an issue regarding what is said to be one of the biggest in the trucking industry: the driver dilemma.  Wilbur has a different view of the driver shortage, being that he doesn’t particularly see one.  He does, however, agree with the idea that drivers must be compensated while they are on the job, regardless of what problems arise while getting routes completed. 

“This industry has always used the mileage pay as a way to shift the risk to the driver,” he noted. “The risk of freight, the risk of weather, the risk of traffic. But that driver’s in the truck in the middle of Kansas ready to work, so why is it on him? Our drivers don’t get penalized for that. It’s been the biggest single thing we’ve done with our company that’s allowed us to grow so fast. “

This brings up an interesting argument that the focus shouldn’t be on the driver shortage, but in fact the driver retention. 

“If you can take that 90% (turnover) down to under 50%, which is where we operate, then it’s a lot easier animal to manage. But you have to question everything you do and take some risks. Because clearly what the industry is doing today isn’t working.”

In closing, it is necessary for all of us in the trucking industry to live in tomorrow.  We must always be thinking one step ahead and in trucking, that might mean a month or even a year into the future.  As the trucking industry moves into 2020, we must be ready to take steps in staying informed and ahead of the game.  And, at Precision Insurance and Finance, it is our goal to do exactly that.  With 2020 quickly approaching, it is our mission to keep our customers informed and safe on the road, so that we can keep this country moving!



Catarevas, Michael. “Roadmaster CEO: Fleet shutdowns ‘cleanse’ the trucking industry.” American            Trucker,  Informa USA, 4 December 2019, www.trucker.com

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