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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.

Slowdown Coming for the Trucking and Rail Industry

With low fuel costs, you would think the transportation industry would be seeing big gains. But, unfortunately, the opposite is true as a slowing economy and lower freight volumes lead to more trucks and railcars being available.

The trucking industry is responding by reducing workers. ABF Freight Systems recently reduced its workforce by 4% because of the slow economic environment. The predictions for 2016 were optimistically cautious a few months ago but have turned to outright caution even though trucking executives generally expect a stronger second half of the year. But, their outlook for this year is described as uncertain.

The slowdown in freight volume leads to shippers having an easier time finding trucks to hire. This puts them in the driver’s seat to negotiate for better terms. It is still unclear at this time the exact factors that are causing the drop in freight volume. Possibly reasons include excessive inventories, a manufacturing slowdown, reduced demand from the energy sector, or lagging retail sales of winter clothing and equipment due to the warmest December on record.

Workforce reduction isn’t the only belt-tightening measure for the shipping and transportation industry. In response to the lagging economy, new truck builds are being reduced. Truck users may be replacing older models with newer ones but are not buying new trucks outright. Orders are down and layoffs might be coming for OEMs.

The impact of the economy on the trucking industry doesn’t hurt us as greatly as it would other OEMs. The commercial truck components we manufacturer are just one of the many components in our portfolio. Diversification across a wide range of industries and strong capabilities enable us to maintain a solid manufacturing base in uncertain times.

Overview of Trailers and Features

Truck trailers depend on the manufacturer and load requirements and state roadway regulations. It is always important to check state regulations and guidelines.

Standard Freight Trailer
The Standard Freight Trailers are commonly used for carrying in most freights. They are classified as either boxed, crated, or palletized. This is a dry van and some features may include Screwed in wood floors, ETrack, lift gates, vented trailers, plate trailer, roll up doors or swing doors.
Common lengths : 28′, 32′, 36′, 4-‘, 42′, 43′, 45′, 48′, 53′
Common Widths: 96”-102”
Common Heights: 12.5′-13.5’
Weight: 48.000 Lbs

Reefer Truck Trailer
Reefer Truck Trailer are used when good need to be refrigerated. A fuel tank and refrigeration unit are directly outside of the trailer. These units are usually found at the front of the trailer. Usually Reefer trailers include eTrack, produce chutes, downloadable T.R.U., roll up doors or swing doors.
Common Lengths: 28′,32′,36′,40′,48′,53′
Common Widths: 96”-102”
Common Heights: 12.5-13.5′

Flat Bed Trailer
Flat Bed Trailers are designed to hold oversized cargo. These oversized materials are loaded either through the top or side of the trailer.
Common Lengths: 26′,40′,42′,45′,48′
Gooseneck Trailer or Dropdeck Flatbed
Specially oversized cargo are used on the gooseneck trailer. It has a two level tandem to accommodate heavy, oversized materials.
Common Lengths: 40′,42′,45′,48′

Lowboy Trailer
A typical lowboy trailer Is extremely low compared to other trailers, has a two drops in deck height, one before the tires, and one after the gooseneck and they are much longer in deck length. They usually haul heavy equipment like bulldozers or other industrial machinery. Their neck is arched so when lowered it becomes a ramp allowing equipment to be pulled on and off.
Common Lengths: 10-29”
Common Width: 8”
Common Height: 9-12”

Although, there are numerous types of trailers with different features for hauling all kinds of materials one thing is for certain they all have Pentaflex components within them to make them safe and successful. Commonly Pentaflex manufactures brake, axle, and other gage metal parts necessary. If you need a part for your trailer, don’t hesitate to speak with us on our expertise in manufacturing quality parts for the heavy trucking industry.

Natural Gas: The Fuel of Today and Tomorrow

One of the biggest recent developments in America—one that has affected industries from energy through manufacturing through transportation—is the natural gas boom.  It has created jobs and spurred an entirely new industry unto itself, and has brought about cheaper consumer electricity. It’s even responsible, in part, for the manufacturing reshoring initiative.

One of the industries in which natural gas is finding a huge place is in transportation—specifically trucking. In fact, it is estimated that by 2020, the global natural gas vehicle (NGV) fleet size will rise by 92%.  At present, the number of NGVs on the road, around the world, is 18.2 million. A recent report predicts that number to become 34.9 million in only seven years.

The U.S. trucking industry—transporting millions of manufactured goods throughout the country—has already begun to jump on board. They are increasingly replacing petroleum with cheaper, cleaner natural gas, and there are currently no signs of this stopping.

Big-name companies around the country are realizing the benefits of this switch. For example, U.P.S. recently made the decision to expand its number of NGVs from 112 to a whopping 800 by next year.  They—like many others—see the myriad benefits: reaping the rewards of federal and state incentives while representing themselves as green to increasingly conscious consumers. And, of course, there are the big-picture benefits: doing the right thing for the planet, and helping to move the country away from oil importing and toward self-reliance.  Finally, it’s good economics: the use of natural gas can save trucking companies up to $1.50 per gallon.

This isn’t, of course, an overnight change, and like all major transformations, it will take time; as of now, there are only 53 natural gas fueling stations in the U.S.  However, Rome wasn’t built in a day, and the momentum here is moving fast and ahead. It will be interesting to track its progress.

Recap of the Spring Trade Shows

2013-03-21_14-49-58_54  One of the highlights of spring is the trip to trade shows and meetings sponsored by the trucking industry. These shows allow companies to gain insight on trends within the industry, as well as future goals.

On March 11 we attended the Technology & Maintenance Council’s (TMC) 2013 Annual Meeting & Transportation Technology Exhibition in Nashville, TN. We kicked off the TMC meeting by attending the Heavy Duty Dialogue (HDD) conference which brings industry leaders and economists together with VP to CEO level executives from supplier companies from the on-highway, commercial vehicle industry.  This conference allows businesses to hear firsthand the condition our industry is in, and the problems we are facing.2013-03-21_17-11-46_473-1

Much was discussed at HDD about the direction of the industry. Class 8 trucks were a hot topic of discussion. Eric Starks, President of FTR Associates remarked that he is “cautiously optimistic” about Class 8 truck sales for 2013 with the market improving in the second half of the year. Another industry leader, Martin Daum, President and CEO of Daimler Trucks North America, reported that “2012 was an extremely successful year for DTNA, but we can do better in 2013.”  With a 44% market share of the North American Class 8 market, Daum feels that it is DTNA’s job to look at the technology of the future. President and CEO Dick Giromini of Wabash National Corp, a leading trailer manufacturer predicted that the trailer demand will remain above replacement levels between 2013 and 2016. This is positive news for the industry.

2013-03-22_11-50-52_319-1After TMC we attended the Mid-America Trucking Show (MATS) in Louisville Kentucky, which gave us an opportunity to hear several leaders in the Heavy Truck industry (at both the OEM and supplier level) talk about business forecasts for the industry and their companies.  Being able to connect with key customers and visits display booths allows opportunities for collaboration. At MATS, Troy Clarke, President of Navistar predicted that as long as manufacturing activity in 2013 continues to trend upward, the requirements to move materials for production will positively impact freight and truck sales.  He said that the three key issues at Navistar were: setting clear goals and metrics to achieve those goals; bringing the new engines to market; and delivering to the budget.  He also stated that the company would make financial progress on a quarter by quarter basis.

Attending these shows allows companies to stay in touch with industry progress to better serve clients. And, doing so at a large, enjoyable show is an added bonus!