A survey conducted by GE Capital Solutions has revealed that trucking industry woes in the U.S. are generally shared as well in Canada, the United Kingdom and France. The survey addressed the top threats to business performance among 1,200 trucking industry leaders and showed that nearly 70% of respondents fingered fuel prices, 69% driver shortages and 40% excessive regulation.
In spite of a recent cooling in fuel prices, nearly nine out of 10 respondents believe fuel prices will increase over the next 12 months. They also reported that fuel represents approximately one-third of their overall costs. Only 7% are using alternative fuels, with U.S. respondents reporting the most use.
In addition to passing costs to shippers, trucking executives are seeking to offset fuel costs by:
- tightening supplier management, 41% overall and 43% in the U.S.
- seeking alternative green initiatives, 36% overall, 34% in the U.S.
- leasing trucks to free cash flow, 18% overall, 14% in the U.S.
“Trucking executives are being seriously impacted by fuel price and driver shortage,” stated Dan Clark, GE Capital Solutions head of transportation. “As a consequence, prices for road haulage are now increasing and have been steadily over the past year. This increase in prices has not been passed on to the consumer at this point, only to the shipper. The trucking industry is not overpricing, they are finally getting the price they deserve.”
Trucking leaders are struggling to keep up with demand for drivers, with 22% of respondents believing the shortage will impact their ability to deliver goods on time to existing customers. Those same respondents also were concerned that the shortage would impact their ability to service additional business.
In the U.S., 20% of additional freight opportunities are at risk of being impacted, GE said. Companies are aggressively seeking to recruit and retain drivers as a result. More paid leave was the number-one method across the U.S. and Canada (nearly 50%), followed by reducing paperwork (36% overall) and improving cab facilities (31% overall). In France, better cab facilities was cited as the best method for attracting drivers.
“There has been a long-term shift in the way the trucking industry views and treats employees,” Clark said. “HR departments have made substantial changes to attract and keep drivers. They are increasing benefits and shortening the routes to help alleviate driver shortages.”
One quarter of trucking leaders in the U.S. looked to maintenance and insurance costs as the best target for savings, followed by salaries and general efficiencies. According to GE, reducing maintenance fees and improving cash flow are driving decisions to lease rather than own.
Almost half of the international businesses said purchasing new trucks could greatly reduce business costs and save management time. Over half of international truck businesses overall intend to acquire new trucks in the next year. Of U.S. trucking businesses, two-thirds intend to acquire units within the next 12 months.
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