3 Trends to Watch for Trucking Industry in the Second Half of 2016 and Onwards.
2016 is half over. Here are 3 trends of trucking industry to watch for now and onwards.
Trucking industry could be facing driver shortfall
About one third of the truck drivers are now 55 or older, says the Canadian Trucking Alliance, and the industry is struggling taking younger generation on board to fill the gap left by the looming wave of retirements. Canadian Trucking Alliance predicts that by 2024, the industry will face the serious lack of labor shortage of 48,000 vacancies.
The truck driver position is not a low paying job since the average earning was listed as $40,728 in 2011 and the annually salary for long-haul driver is around $75,000, says the industry insider. However, many believe that the lifestyle of long hours and work-life imbalance weight more comparing with payment.
As a result, both the cost and difficulty of recruiting drivers will continue to increase in the second half of 2016. Trucking companies will have to spend more on recruiting, background checking, training and road testing to attract and retain younger generation.
Equipment cost will rise continuously
On Thursday May 19th, the Canadian loonie closed at the lowest level of the month, continued weakening with the pressure of the strengthening U.S. greenbacks and falling oil prices. Moreover, according to Bloomberg, the loonie is expected to weaken, down to 75.7 cents by the end of 2016. Since most of the Canadian truck dealers purchase the equipment from U.S., the Canadian buyers will have to spend 40-45% more if they need to replace or replenish the trucks onwards.
At the beginning of March, Prime Minister Justin Trudeau visited President Obama, solidified his commitment made at Paris climate change summit last year which was to adopt the U.S. emission standards for heavy trucks. Later in April, he signed the Paris agreement on climate change, promised to reduce the emission by 30% at 2030. The ever strengthened relationship between Canada and U.S indicates further acceleration of clean energy transition and shared climate-protective regulations.
The changing rules and regulations are having a large impact on trucking companies, making it more difficult to support profit margin in an ever regulated industry.