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The State of the Industry: Trucking in 2020 and 2021

While the North American heavy trucking industry was already due for a slight dip in 2020, the global COVID-19 pandemic has compounded the situation. In this post, we will cover what was expected for 2020, what we can anticipate moving forward, and what Pentaflex is doing about it.

The Industry Trends

Like every industry, trucking goes through economic cycles that last on average about 4 years per cycle with a typical recession lasting about 10 months.

What does this mean?

COVID-19 is not the first time this industry has experienced unprecedented turmoil. While this awful pandemic has seemed to impact health care, job security, and basic livelihood, the trucking industry experiences large setbacks like this regularly. What

Was Expected in 2020?

The trucking industry as a whole saw a huge boom in the numbers starting in 2017 and lasting through 2019, which statistically would mean we were already preparing for a drawback in 2020.

Experts were predicting a gradual dip from Q1 through Q3, and then the trend would slowly creep back up as we moved into 2021.

Even though 2020 was anticipated to be a soft year in the industry, it has only been exasperated by the COVID-19 pandemic.

What Can We Anticipate Now?

As 2020 began, we saw the expected downward trend in the industry. But, as COVID-19 took its full force effect moving into April, we saw a more than shocking dip in the market. However, as always with economic trends, there is light at the end of the tunnel.

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According to the Coyote report for 2020-2023, we have already experienced the market floor at the beginning of May. While the industry will not recover overnight, we will still see the normal trends as expected, just nine to twelve months later than expected.

What Does This Mean?

While there is no need to panic, it is time to go into a defensive state, protecting cash flow and implementing leaner and more efficient processes and supply chains. As with any recession, you will most likely see some businesses either have to decrease their production abilities or shut their doors altogether.

This is also the time to diversify your suppliers. If you were on the fence about a certain process or agreement, now is the time to get your ducks in a row before the rest of 2020 and 2021 play out.

Basically, everyone in the chain needs to be very nimble to get through the already expected downturn and be able to react quickly to customer needs as their demand increases.

Keep in mind that these numbers are based on the assumption that the economy will not be hit with another COVID-19 wave this fall and our country and world would be put on pause again. However, that possibility only strengthens the need for double-checking your processes, checking in on your team, and clearly articulating your abilities to your customers and your needs to your suppliers.

What About Pentaflex?

We are still here. Through years of listening to our customers and our team, streamlining processes, and preparing for the future, we are still able to provide the highest quality in metal components. We will continue to keep an eye on the trends and will always communicate clearly with our customers, our employees, and our community. And we look forward to providing for the trucking industry at full force when we see the end of this recession in the near future.

Questions? Call Pentaflex directly at 937-325-5551 or contact us by filling out this form.

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The State of the Trucking Industry Today and Looking Forward

Despite several challenges, 2018 was a strong year for the American trucking industry. Increased consumer spending greatly boosted shipping demand, resulting in driver shortages as trucking companies rushed to fill orders. With new trade deals and industry initiatives to support growth, we predict a successful year ahead for the trucking industry.

Current State of the Trucking Industry

The strong U.S. economy has resulted in a consumer spending boom. This brought about greater demand for trucks to transport consumer goods. The National Retail Federation (NRF) predicts that holiday sales will reach approximately $720.89 billion in 2018, a 4.3-4.8% increase compared with the 2017 holiday season.

However, this increased demand has led to some challenges for the trucking industry. The influx of new orders has strained trucking’s workforce as shipping companies struggle to meet demand. Additionally, the implementation of the electronic logging device (ELD) rule mandated that all trucks should install tracking devices to better account for shipment status. While this has helped create greater transparency and safer working conditions, it also further limited the amount of truckers allowed on the road, as drivers without an ELD cannot commercially drive.

Amazon, FedEx, and other major companies have aimed to combat the driver shortage and maintain efficient operations by hiring thousands of temporary workers for the 2018–2019 holiday season.

On November 30th, representatives from the U.S., Mexico, and Canada officially signed the new United States–Mexico–Canada Agreement (USMCA), replacing the original NAFTA terms. If the new deal is successfully passed through Congress, we expect to see greater wage growth for American truckers.

Yet despite the benefits to continued free trade between the U.S., Mexico, and Canada, Congress may seek to impose caps on cross-border trucking, which may reduce trucking demand. There is also a chance that Congress may require vehicles produced in the U.S. to be composed of at least 75% North American–made parts, driving up costs for new trucks and vehicle maintenance.

The Trucking Industry in 2019 and Beyond

We expect capacity to stay tight with economic growth, with the American Trucking Associations (ATA) estimating that freight volume will increase 2.3% from 2019 to 2024.

ATA Chief Executive Chris Spear aims to address the American trucking industry’s challenges while supporting its continued growth. Spear seeks to make training the younger generation of drivers a top priority moving forward, in hopes of adding numbers to the workforce as demand for truckers continues to grow. The ATA is also researching new methods to increase productivity and implement better safety technology while working to offset tariffs and additional regulations affecting the trucking industry.

The ATA projects that for the next 18 months, the trucking industry will benefit from a strong economic climate. The trucking industry could see an estimated $6.6 billion of new revenue each year if Congress approves the USMCA deal.

The industry experienced the sharpest growth in demand for trucks of the heaviest Class 8 weight segment. The ATA estimates that trucking manufacturers will fill around 305,000 orders for Class 8 trucks in 2019, a 19% increase compared with 2017.

Prep for the Future with Pentaflex!

With continued high demand, we expect 2019 to be a strong year for the trucking industry.

To help in the design of new trucks and maintain the existing fleet, Pentaflex provides a complete range of metal stampings and value-added services, including machining, welding, part washing, and assembly. We also provide components for successful trucking operations, including emissions and axle/brake components.

Our facilities are fully equipped to help your trucking company excel, and our talented staff will continue to deliver high-quality products to our customers.

To learn more about our services and capabilities for the trucking industry, contact us today.

Filling the Trucking Talent Gap with Autonomous Vehicles

There are 1.7 million truck drivers in the country. But more are needed!

From retail and ecommerce deliveries, to garbage collection, to even manoeuvring difficult terrains like underground mines, almost every aspect of civilized life requires powerful big-rigs to come to the rescue.

The Trucking Talent Gap

Unfortunately, trucking has developed an image that is turning away the next generation of workers and value driven Millennials from a career in this crucial field.

The list of complaints is long, and for-hire truckers have it rough. They must contend with issues like unavoidable traffic, long hours on the road with few rest areas, and less time at home with their families.

This has led to a talent gap in the trucking sector, with many jobs going unfilled. While many firms have been offering sign-on bonuses and other incentives to drive hiring efforts, the number of applicants is still falling short.

Autonomous Technology to the Rescue

To fill the gap, self-driving technology is being explored for trucking fleets. While autonomous passenger cars have been getting a lot of attention, autonomous trucks have already been hitting the road to research their capabilities. Embark, Amazon, Daimler and the automotive stalwarts are all toeing the same line.

Currently, the self-driving technology is being tested alongside human drivers to ensure safety. Autonomous trucking will in most cases identify obstacles that dozing eyes miss, provide long haul relief to exhausted drivers and improve the quality of their lives. It is in no way ready to completely replace human drivers.

Most prototypes that have seen road action come heavily equipped with sensors and cameras that can masterfully handle darkness, glare, fog and natural hurdles. Added benefits of running on electricity and constant relay of performance feedback for fuel optimization are also in the works.

All in all, companies are eager to invest in trucking and return the sector to its former strength. This time with the help of technology.

Pentaflex has been the supplier of choice for customers who require complex, heavy gauge deep drawn components and sub-assemblies for their big-rigs and trucks. We believe that the disruption on the horizon is one that will positively impact trucking and the many industries served by this sector.

With New Redesign, a Trucking Industry Workhorse Meets New Standards

Big semi-truck models don’t undergo full redesigns as fast as cars. So, the 2018 model of the Freightliner Cascadia from Daimler Trucks will be the first full redesign since it was introduced to the industry in 2007. For over 10 years this model has been an industry staple.

The new design features improvements inside and out. The aerodynamically sloped body and one–piece windshield offers a sleek look and an 8% gain in fuel efficiency over the 2007 model. Body features such as longer side extenders, lower chassis fairings, drive wheel covers, and wheel fairings all add aerodynamic features that help save fuel. Daimler’s Detroit Brand diesel engine powers the rig.

Attracting and retaining drivers is a major industry issue. With this redesign, interior noise is reduced with improved door seals and there are more amenities for divers. Options include a 2-seat dinette, a Murphy-style bed, ambient LED lighting, multiple power outlets for electronics, and bigger storage and appliance options. The cab will appeal to truckers who travel long hauls.

Connectivity and electronics offer serious improvements for managing data and safety. The connectivity system provides a “virtual technician” remote diagnostic service and analytical tools for information on fuel efficiency as well as safety performance. With over-the-air engine parameter programming and remote engine and other powertrain electronic controller update ability, the company says this is the biggest electronic device on the road.

Collision avoidance with automatic braking, lane departure warnings, and blind spot monitoring add to the safety value for truckers and all others on the road. Improved performance combined with high-level safety features will make this redesign a popular choice for both trucking companies and drivers.

As a leading manufacturer of metal components used throughout the trucking industry, we are excited to see new technologies and innovative systems improving fuel efficiency and safety in these big vehicles.

For more information on the Freightliner Cascadia, read the full article here.