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Chip Shortage 6270117fa5ccf

More challenges ahead for the trucking industry to tackle

May 3, 2022
Regardless of the problems facing the industry, trucking is resilient and will continue to navigate these latest hurdles.

A couple of items in the news caught my eye recently. The first was about the most recent pandemic-related lockdowns in China in early April. One of the country’s leading production centers for electronic components was shut down for five days and the government extended a quarantine mandate in Shanghai that had been set to expire. The second was news of increased prices for metals used to produce lithium-ion batteries.

Neither of these bodes well for the trucking industry. The microchip shortage is already limiting production of medium- and heavy-duty trucks to the point where dealers and leasing companies are on allocations, which means fleets are, too. Many of us were hopeful that we would start seeing some relief from the chip shortage by midyear and that truck makers would be able to increase production to meet demand. It looks like we might have to wait a bit longer for that relief to come.

See also: Trucking faces an 'everything' shortage

Regarding batteries, it seems like electric vehicles (EVs) are starting to get some traction as fleets are recognizing duty cycles where they make sense—short-haul, package pickup, and delivery operations where the trucks return home every day to be charged.

With many states setting zero-emission goals for vehicle production, the industry needs to start gaining some experience with EVs. Unfortunately, EVs already cost more than their diesel-powered counterparts and increased battery prices will make the total cost of ownership discussion more difficult even when you factor in grants and incentives.

It can be easy to view this information as gloom and doom. But I believe in the resiliency of the trucking industry and am certain it will handle these challenges. For months now, fleets have been figuring out how to successfully extend the life of older assets since they have been unable to get all the new trucks they need. They are checking asset health and beefing up maintenance schedules to ensure their trucks can meet customer demand.

See also: How to keep older assets on the road longer

As for the potential for higher-priced EVs, there are many innovative fleets out there that will still dip their toes into the EV pool. These fleets want to get some firsthand, real-world experience with EVs so they will be prepared when they move to widescale production. Plus, they know that the next round of emission regulations will likely raise the cost of diesel-powered vehicles with no corresponding increase in fuel economy. This may bring EVs closer to parity. 

I’ve been in the trucking industry for many years and am optimistic that by working together, we as an industry will navigate these latest challenges. There are creative, innovative minds among us—and risk-takers looking to the long term and seeing a cleaner future for trucking.

Patrick Gaskins, SVP of Corcentric Fleet Solutions, oversees both sales and operations for the company's fleet offerings. Gaskins joined the company in 2010, bringing more than 30 years of experience as a financial services professional in the transportation industry. He leads a team that works with a supply base of more than 160 manufacturers to help the country’s largest fleets manage all aspects of their fleet operations and fleet-related spend.

About the Author

Patrick Gaskins | Senior vice president, Fleet Solutions

Patrick Gaskins is a financial services professional serving the transportation industry for over 30 years. Gaskins earned his BBA in Finance from the University of Miami, FL in 1989, and received his CTP certification from the National Private Truck Council in 2002. He has held positions with GE Capital, TCF Equipment Finance, and various small independent lessors. 

He began his career with Corcentric in 2010 as Vice President of Financial Services, was promoted to Senior Vice President of Sales and Operations, and is now taking the role of Senior Vice President, Fleet Solutions.  In his new role he will lead Corcentric’s Captial Equipment Solutions, Fleet Procurement, Supply Management, and Remarketing teams. Gaskins will bring to the Fleet practice his expertise in developing data driven solutions to complex transportation transactions, driving efficiencies, and reducing expenses for Corcentric’s customers.

The Fleet Solutions practice leverages technology and the purchasing power of over 1,700 member fleets operating approximately 800,000 assets to provide its members with access to cost effective national account purchasing programs, fleet financing, asset management, and remarketing services.

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