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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.

Recap Of FABTECH 2014

Pentaflex management team attended the 2014 FABTECH conference and exposition in Atlanta, Georgia. The conference was attended by 30,000 attendees involved with metalforming, welding, assembly, and coating operations. There were 1500 exhibitors displaying equipment and services at Georgia World Congress Center in the 550,000 square feet of space.

The FabTech show was used to introduce the winners of the Precision Metalforming 2014 Manufacturing Excellence awards. For the second year in a row, Pentaflex was selected as the winner for awards in two of the seven categories. Pentaflex won the awards for Safety and Education-Training. Press releases, articles in the Metalforming Magazine, videos on the PMA website, and recognition in the PMA booth at the FABTECH show discussed the Pentaflex awards.   The videos which detail the actions that Pentaflex took to achieve the awards are a new feature to the awards process and present a great picture of the Pentaflex business.   Pictures from the PMA awards ceremony and the Awards of Excellence display at the FABTECH show are shown below.fabtechpic fabtechpic1

As always, FABTECH delivered a great opportunity for manufacturers from the U.S. and 70 other countries to see new technology, attend educational seminars, and network with peers. Manufacturers were exposed to keynote presentatons from senior executives about on-shoring and given insights on the future of US manufacturing. In addition, in honor of Veterans day, there were special events honoring veterans and an emphasis on connecting organizations that sponsor matching veterans with manufacturers for job opportunities. FABTECH attendees and exhibitors also raised more than $10,000 thru FABTECH Expo Cares program to benefit Workshops for Warriors, a nonprofit organization dedicated to training, certifying, and placing veterans in manufacturing careers.

Sharing Our Experience from the FabTech Show

Each year Pentaflex sends our management team to attend various trade shows and conferences. This year we had the opportunity to attend the 2013 FabTech conference and exposition in Chicago, Illinois.

Around 40,000 attendees involved with metalforming, welding, assembly, and coating operations were in attendance. The event was held at the McCormick place. The 600,000 square foot facility allowed 1500 exhibitors to display their equipment and  services.

The FabTech show was also used to introduce the winners of the Precision Metalforming IMG_20131117_180213_101 (2)2013 Manufacturing Excellence awards.  Pentaflex was selected as the award winner for two of the awards in the categories of productivity and quality systems.  Press releases, articles in the Metalforming Magazine, and recognition in the PMA booth at the Fabtech show discussed the Pentaflex awards.

Conferences like this one are a great way to learn about the newest trends throughout the industry. As you all know American manufacturing has been a hot topic in the recent year. IMG_20131118_105055_450The lead article from the FabTech show daily newspaper highlighted that manufacturing in the US is here to stay.  The article went on to explain manufacturing needs that will support continued growth in the US.  They included: 1) giving businesses certainty—businesses can’t plan without certainty on taxes, regulations, health care, etc. 2) remember small businesses in tax reform—–most small businesses are S corp and need to be thought of the same as C corp businesses, 3) Don’t sacrifice innovation and capital investment in the name of tax reform—many tax credits hanging in balance for continuation into 2014, 4) training for young workers the skills needed for manufacturing careers—manufacturing jobs are good, high paying jobs requiring sophisticated math and mechanical skills.

The keynote speaker for the FabTech conference was “Pro-Business” economist Alan Beaulieu.  He highlighted that even though most of the country thinks we are in a recession we are actually in a sustained period of growth—-albeit small.  His advice to businesses is to prepare for good years in 2015-2017 by spending money on capital investments in 2014 before rising interest rates and additional regulations from Dodd-Frank increase costs.  He also stated that there would be a slight downturn in the second half of 2014 and that time can be used to install new equipment, train workforces, and ready companies for the three years of increased growth that he sees from 2015 to 2017.  Pentaflex is following that strategy and has recently purchased two new servo presses to be installed in 2014 which will provide added capacity and process forming capabilities going forward. We couldn’t be more excited about the years ahead.