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Chevin Fleet TRUCKING MARKET FEARS 'GREAT PURGE' DUE TO SOARING INFLATION As inflation continues to soar and rates spiral even lower, trucking companies across the nation are beginning to experience what is called the “Great Purge.” The economy has been in a tailspin since the pandemic began. The trucking industry and its 2 million truck drivers have not been immune to its effects. The industry is in the midst of a years-long driver shortage, which the COVID-19 pandemic has only exacerbated. As a result, many trucking companies are struggling to find enough qualified drivers to meet the demands of their customers. Trucking companies nationwide are being forced to confront the possibility of letting go of a substantial number of their drivers and making other difficult decisions to stay afloat. Rising global oil prices also affect the industry’s current predicament. Crude oil prices have more than doubled since last year, and trucking companies are feeling the pinch at the pump. Similarities with the 2019 Freight Market Crash There are several parallels between the current market conditions and those of the freight market crash of 2019, with some saying the industry is inching closer and closer to an even deeper rock bottom. During that time, rates also plummeted, and there was a widespread driver shortage. It led to hundreds of trucking companies going bankrupt, with the majority of them caused by the inability to cover the cost of maintaining their businesses amidst deflating rates. However, the main difference is that the current market conditions are primarily driven by inflation rather than a decrease in demand, as was the case in 2019. Small Truckers Are Getting Pushed Out of Business The current market conditions are proving difficult for small trucking companies. Many of these businesses are forced to decide whether to raise rates or get out of the business altogether. Some trucking companies choose to do both, but even that may not be enough to keep them afloat. With the cost of doing business continuing to rise and rates staying relatively static, many small truckers are being pushed out of business. It’s also worth noting that too many truck drivers for the current amount of work available are also putting downward pressure on rates. In other words, more truck drivers are chasing fewer loads, which often means lower pay. This difficult reality forces drivers to choose between making less money or leaving the industry in search of greener pastures. How Trucking Companies Can Weather The Great Purge To survive the economic downturn, many trucking companies are forced to make difficult decisions, including slashing pay and benefits and reducing the number of drivers on their payroll. However, some companies are starting to realize the importance of investing in efficient ways to reduce operating costs. One way to do this is by investing in asset maintenance management software. It helps trucking companies keep track of their vehicles and ensure that they are properly maintained. It can help reduce the number of breakdowns and accidents, which can ultimately help save the company money. In addition, asset maintenance management software can help trucking companies become more efficient and organized, leading to cost savings. Challenging Times Ahead While the industry faces some challenging times ahead, those who can weather the storm and make smart decisions will be better positioned to succeed in the long run. Investing in the right software can help trucking companies weather the current market conditions and emerge stronger when the industry eventually recovers. It’s unclear when that will be, but one thing is certain: the trucking industry is in for a bumpy ride, and those who can adapt will be the ones that might come out on top. Sources: https://www.chevinfleet.com/asset-management-software/ https://www.theepochtimes.com/anxieties-rise-in-trucking-market-with-fears-of- great-purge_4564145.html https://www.freightwaves.com/news/a-great-purge-is-pushing-small-truckers- out-of-business-at-an-unprecedented-rate https://www.freightwaves.com/news/truckings-market-crash-severe-amid- inflation
