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Industry trends to watch

The trucking industry is always evolving. Sometimes the evolution is spurred on by internal developments and other times it’s external forces that bring about change.

Speaking at a recent NationaLease meeting, Rob Garcia, senior vice president of supply management at NationaLease, talked about some of the trends that are affecting the industry.

  • Evolving logistics model: E-commerce and omni-channel marketing are changing freight patterns and causing many fleets to get into the last mile delivery segment of the market. There is also a movement to bring on-demand load-sharing technologies to the freight market.
  • Parts, service and maintenance are expanding outside of the traditional OEM dealer network: The complexity of modern EPA-compliant vehicles is keeping dealers’ service bays full and has necessitated a secondary service network for PMs, tire maintenance and replacement parts.
  • Legislation to require underride guards: In December, legislation was introduced in the U.S. House of Representatives and the Senate that would require side underride guards on trailers, semi-trailers and single-unit trucks heavier than 10,000 lbs. built on or after the rule’s effective date.
  • Approval of alternative to conventional rear-vision mirrors: Stonebridge’s Mirror Eye was approved by the Federal Motor Carrier Safety Administration in lieu of conventional rear-vision mirrors.
  • Carbon emissions for 2027: Emissions standards for model year 2027 tractors require at least 25% lower carbon dioxide emissions and fuel consumption from a 2017 model year Phase 1 tractor.  The 2027 rule will require engines to achieve reductions in carbon dioxide emissions and fuel consumption that are 5.1% better than the 2017 baseline. The rule also requires engines to reduce emissions by 1.8% by 2021 and 4.2% by 2024.
  • Developments continue in hydrogen fuel cells and electric vehicles: Nikola, Toyota and Tesla (among others) are working on hydrogen cells and electric power for commercial vehicles. The technology promises super performance, but the question remains, will those promises materialize?
  • Fuel tax legislation: There is legislation pending on increasing the fuel tax. Increases could be as much as 60 cents a gallon.
  • Attempt to repeal Federal Excise Tax: The trucking industry is lobbying Congress to eliminate FET on new vehicles. FET has increased by 300% since it was first enacted and can add as much as $22,000 to the price of new heavy-duty truck. Since 1956, FET has been a vital source of revenue for the Highway Trust Fund.
  • Changes to marine fuel: The International Maritime Organization is limiting the allowable amount of sulfur in fuels beginning next year. The move to lower sulfur maritime fuel will stress the stock of fuel used to power truck, and estimates are that ships will need to replace three million barrels of fuel a day.
  • Online sales continue to grow: In February online sales beat brick and mortar sales. In August, non-store retail sales accounted for 11.8% of total sales.
  • Logistics costs rise: U.S. business logistics costs rose 11.4% last year to $1.64 trillion, equal to 8% of GDP. Transportation costs rose by 10.4%.

It is important to keep informed of developments that are affecting the trucking industry so you can make the necessary changes to your operation to maintain profitability during shifting conditions.

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