The first half of 2021 presented an unprecedented slowdown of the global supply chain in the wake of the pandemic. This widespread disruption to the supply chain has continued to reverberate up to the present, nearly eighteen months since the pandemic was declared. The gaps in production and distribution for everything from raw materials to finished goods has created significant back orders that are not being filled fast enough to keep up with demand. In some instances, customer demand for sectors impacted by lockdowns has seen explosive growth once the lockdowns were lifted, creating a bottleneck in the supply and distribution chain. The Suez Canal obstruction exacerbated this phenomenon in March 2021.
In the article below, we walk you through recent trends and statistics of the US trucking industry, as well as the predicted trends for 2023.
Trucking Industry Statistics
Trucking industry data from the past several decades indicates the industry has enjoyed perennial growth that will only increase in the post-pandemic world. The increased demand and supply bottlenecks have created a strong tailwind for the trucking industry which will help offset the increased cost of operation due to factors such as increased driver compensation, regulatory fees, and rising fuel costs.
- Trucking represented 80.4% of the U.S.’s freight cost in 2019, totalling a gross freight revenue of $791.7 billion.
- Trucks moved 67.7% of ground freight between the U.S. and Canada and 83.1% of trade with Mexico, for a total value of goods at $772 billion;
- Employment is up 140,000 from the previous year with 7.95 million people employed in trucking-related jobs. This includes 3.6 million professional drivers;
- 91.3% of fleets operate six or fewer trucks and 97.4% operate 20 or fewer, meaning most carriers are small companies.
- 13.4% of all registered vehicles are commercial trucks.
- As of January 2019, 24.44¢ of federal fuel tax was used to pay for each gallon of diesel fuel.
- Size of the truckload market has grown 1.6% year over year from $193.21b in 2020 to $196.34b in 2021.
- Size of the less-than-truckload market in the U.S. has grown from $76.41b in 2018 to $80.16b in 2021.
- In 2021, the total market size of the less-than-truckload industry in the United States is expected to reach over 80 billion U.S. dollars.
- Greatest challenges for polled truckers in the trucking market are driver-related costs, insurance costs and liabilities, and finding/retaining customers.
- Driver wages account for 32% of all trucking related costs with driver benefits accounting for another 10%. (Source:An Analysis of the Operational Costs of Trucking: 2020)
- 26% of trucking costs are spent on fuel alone with another 14% used for truck/trailer payments. (Source:An Analysis of the Operational Costs of Trucking: 2020)
- Number of enterprises in the truckload market grew from 5,742,100 in 2018 to 6,389,000 in 2021.
- Insurance premiums for trucking companies have seen a huge spike in the last few years, totaling around $12,000 to $14,000 today. (NU Property Casualty 360)
Industry Reliance on Trucking
Every major industry relies heavily on the trucking industry to maintain their supply chain. This reliance on trucking by the major industries is echoed in smaller industries. Everything from raw materials from forests, mines, and farms must be transported by truck in a process that repeats itself all the way to the end user or consumer.
- Agricultural Products - 82.7%
- Dairy, Fruit, Vegetables, and Nuts – 92%
- Pharmaceutical Products – 65%
- Lumber and Wood Products – 91.9%
Owner-operators are a significant contributor to the trucking industry’s overall capacity. These drivers/business owners tend to be older men and military veterans. Due to their close involvement with the day to day operation of their companies, owner-operators are statistically safer drivers than company drivers, and earn salaries that are up to four times greater than that of company drivers working for large carriers.
- Of the $700b in trucking related revenue, $350b came from FTL For-hire fleets, $250b from FTL private fleets, $60b from courier & parcel, and $40b from LTL.
- 33.8 million trucks across all classes, 1 through 8 (i.e., light-, medium-, and heavy-trucks) (Source:Transportation Statistics Annual Report 2020).
- Owner-Operators primarily operate Class 8 Trucks (33,001 pounds and greater). There were approximately 2.9 million registered combination trucks (tractor-trailers) in 2018.
- Freightliner – 37.4%
- Peterbilt – 14.7%
- Kenworth – 15.7%
- International – 12.1%
- Volvo – 9.7%
- Mack – 7.5%
- 34 percent of all owner-operators served in the military.
- Owner-Operators logged nearly 121,500 miles in 2018, of which 26,000 was deadhead.
- Owner-Operators median net income is $50,000, but there are ways to make your trucking business more profitable.
- 6 percent of Owner-operators are now women in trucking
- Minority owner-operators are around 21 percent.
- Most owner-operators became owner-operators at 36 years old
- More than 60 percent of owner-operators are away from home 151+ nights a year
- The average owner-operator has a 2008 model year truck. A majority of owner-operators own a Peterbilt, followed secondly by Kenworth.
- Cummins and Detroit diesel are the top two engines among owner-operators
- The typical owner-operator has accumulated approximately 2.9 million miles of driving during their career, most of which was without a Department of Transportation reportable accident resulting in 40 crashes per 100 million vehicle miles traveled, or almost 3.7 times below the national crash rate for the overall trucking industry.
- While van trailers are the most common trailer pulled, the majority of owner-operators pull flatbed or reefer trailers.
- There are approximately 350,000 to 400,000 owner-operators
- On average, the owner-operator has been driving for more than 20 years
Employment Trends In the Trucking Industry
Drivers throughout the industry endured a particularly harsh year in 2020 sandwiched between mass stay at home orders followed by a surge in logistics orders. Many drivers continued working throughout the pandemic in the face of harsh conditions on the roads due to lockdowns. Despite their efforts to keep cargo moving to where it needs to go, the demand for new drivers remains at an all-time high.
- 11.84 billion tons moved by truck in 2019, up from 11.49 billion tons in 2018.
- In 2019, there were 3.6 million truck drivers employed in the U.S. (American Trucking Association)
- 7.95 million people were employed in trucking-related jobs in the U.S in 2019. (American Trucking Association)
- 6.7% of the truck drivers in the U.S are women. (American Trucking Association)
- 41.5% of the trucking industry drivers are minorities. (American Trucking Association)
- The average age of drivers in the trucking industry is 46 years old. (American Trucking Association)
- The average annual wage for heavy and tractor-trailer truck drivers is $46,370. (U.S. Bureau of Labor Statistics)
- The average annual salary for light or delivery service truck drivers is $41,960. (U.S. Bureau of Labor Statistics)
- In July 2020, the average hourly earnings for employees in the industry was $26.30. (U.S. Bureau of Labor Statistics)
- The average industry employee worked 41.2 hours per week in July 2020. (U.S. Bureau of Labor Statistics)
- To combat the truck driver shortage, the industry will need to hire about 1.1 million new drivers for the next decade or an average of 110,000 drivers per year.(American Trucking Association)
- The trucking industry lost more than 88,000 jobs in April 2020, a 5.8% drop from March 2020
- The impact of COVID-19 sent the industry on an employment roller coaster ride with a peak unemployment in June of 2020 at %12, only to plunge to %6.3 by August of 2020.
- Food Service distributors were among the hardest hit sectors, enduring an outsized negative impact due to the closures of schools, restaurants, and hotels.
- Companies that were forced to lay off their drivers due to the impact of lockdowns continue to struggle with bringing drivers back. A situation that continues to cause widespread shortages in the food service industry.
Trucking Industry 2023 Forecast
Looking forward at trucking trends for 2023, the trucking industry in the US will probably still have to contend with issues like high gas prices, high insurance costs, a lack of drivers and equipment, and shifting labor laws. Future fleet management practices for freight businesses will increasingly use and rely on technology, with an emphasis on fleet maintenance. Cargo transport and last-mile delivery will be impacted by changes in consumer buying patterns, such as a move toward a mix of traditional and e-commerce retail. The industry's top focus will likely be on safety for several reasons.
In 2023, it's likely that technology will be fundamental to how freight businesses manage their fleets. These businesses will use technology to manage routes, arrange maintenance, and keep an eye on driver conduct. Due to an equipment shortage brought on by COVID-19 and a congested global supply chain, fleet maintenance will be prioritized over purchasing new vehicles. As fewer new trucks enter the market, this trend is anticipated to last until 2023 and beyond.
Consumer Spending Habits
The market for last-mile delivery and cargo transport could be impacted by consumer spending patterns. The pandemic has sped up the transition to e-commerce, increasing the need for last-mile deliveries from the fulfillment center to the consumer’s door. However, as we get farther away from the pandemic and lockdown practices, consumers are now online shopping and in-person more than they have in the last few years. This may also help level out and slow down the expansion of e-commerce demand in the coming years.
Safety as a Priority
Safety will remain a top focus even with the economic and labor-related challenges the trucking sector is now facing. Beyond just wanting to maintain a workforce of happy and healthy truckers, there are other factors incentivizing the industry to focus on safety measures. To decrease accidents and the need for repairs or new trucks, freight companies are likely to concentrate on improving driver conduct. The scarcity of equipment on the market and the growing insurance rates also encourage business owners to maintain top safety practices to preserve trucking euipment and keep insurance costs at bay.
The trucking sector is expected to see consistent and steady growth, with an estimated growth rate of 6% from 2020 to 2030. This growth rate is about average compared to the rest of the country, but does take into consideration the recovery after the COVID-19 pandemic, so this rate is likely better than trucking would have seen otherwise.
2020 was a unique year in the history of the trucking industry. While creating a short-term crisis for the industry, the widespread economic and supply disruption has also created an unparalleled opportunity for growth going forward. The single greatest limiting factor the industry will face into 2023 is a driver shortage that has been exponentially worsened by a higher than average demand for shipping. Across the board, employers are increasing wages and offering greater incentives to their drivers and potential recruits in an effort to combat a worsening driver shortage.