From Dave Dudley’s “Six Days on the Road” to Red Sovine’s “Phantom 309,”trucking songs have kept the big wheels rolling on America’s highways for decades.
Too often, however, we forget about how important trucking is to the U.S. economy. Trucking hauls 67 percent of America’s freight tonnage — those big rigs haul a heck of lot of product. It’s a $600 billion industry.
That’s why I enjoyed this morning’s presentation at the U.S. Chamber of Commerce byBob Costello, chief economist and vice president at American Trucking Associations. Costello served on a panel with the chief economists of the chamber, Freddie Mac andAmerican Petroleum Institute, but the overall economy, housing and energy get lots of press. Trucking, not so much.
So here are five things you should know about the state of trucking in America:
Tonnage carried by trucks is up, thanks to fracking and housing
Trucks hauled more than 9.4 billion tons of freight last year, an increase of 2.4 percent from 2011, but the total number of shipments grew by less than 1 percent.
Economic trends explain why trucks are carrying heavier loads. Tonnage shipped by tank trucks has increased thanks to the growth of hydraulic fracturing — a way of extracting oil and natural gas from shale formations.
“We haul a lot of freight in and out of those fracking sites,” Costello said.
Fracking requires “sand, water and a little bit of chemicals,” he said. “It all goes in tank trucks, and it all is very heavy freight.”
The rebound in the housing industry also has increased tonnage hauled by flat-bed trucks.
If you want a good-paying job, drive a truck
Truckers are “the free agents of today,” Costello said.
Good drivers with clean records can command high pay and often signing bonuses in the $2,000 range, he said.
Turnover is high in the industry, partly because truck drivers tend to be older than most American workers and many of them are retiring. The industry needs to hire about 100,000 new drivers a year, Costello said.
Last year, trucking companies faced a shortage of 25,000 drivers. If housing continues its growth, that shortage could grow to 40,000 this year, he said.
Lots of folks just don’t want to be on the road away from home for a week.
Small trucking companies are struggling
Shipments by small trucking companies decreased 6.3 percent last year, and they’re not adding trucks to their fleets.
Just like in other sectors of the economy, small businesses in the trucking industry “are having a difficult time,” Costello said.
One reason is that trucks cost a lot more now, thanks to new equipment mandated by theEnvironmental Protection Agency. That’s good for the environment, but the cost of the tractor part of a tractor-trailer truck has increased from $95,000 in 2006 to $120,000 today, Costello said.
Many trucking companies are selling two used trucks to afford one new one, he noted.
Financing is tougher to get, and leasing has increased, he said.
There’s a lot of interest in heavy-duty natural gas trucks
The price of natural gas is about half of what diesel fuel costs, so many trucking companies would like to convert part of their fleet to natural gas, just like delivery companies with smaller trucks are doing.
Real obstacles stand in the way of this conversion, however. Big rigs that run on natural gas cost $50,000 to $60,000 more than diesel trucks, Costello said. Plus, there’s a need for maintenance facilities and fueling stations, although fueling stations are starting to come on line.
Trucking companies want their taxes raised
Trucking is the rare industry that actually would like to be hit with a tax increase. That’s because truckers have to deal with America’s inadequate road infrastructure every day, and Congress hasn’t been willing to raise federal gas taxes in order to finance improvements.
“We want the fuels tax to go up,” Costello said.
– reposted from The Business Journals