2023 Outlook for the Trucking Industry
With 2022 in the rear-view mirror, truckers want to know what to expect for the truck and transportation industry as a whole heading into 2023. After the turbulence over the past couple of years regarding economic and supply chain impacts from the COVID-19 pandemic, many fleet owners and truck managers are wondering what's in store for them, and how long until things stabilize and return to normal.
This past year showed us that things take time to return to normal, and experts say that 2023 will be no different - albeit, slowly but surely getting better throughout the year.
Below are some of the most talked about trends for the trucking industry heading into 2023. Read on to learn what's in store.
Trucking Trends for 2023
1. Looming Recession Keeps Truckers on Their Toes
Economic and logistical analysts have been debating if and when we see a major economic downturn in 2023. This past year saw rising costs and inflation take a toll on most truckers and fleet managers. And with the Fed attempting to combat inflation by increasing rates, managers are tightening their budgets to stay afloat.
The good news is that consumer spending and product demand expect to remain high. Truck utilization rates continue to be above the historic average. And technology enhancements bring a competitive edge and degree of efficiency that make it easier for fleets to perform their business operations (more on this below).
All eyes will be on the economy over the rest of this year in hopes that the recession will have as minimal an impact as possible.
2. High Operating Costs Renews Focus on Logistical Efficiency
Costs for operating fleets continues to rise substantially, and it looks like this higher cost structure is here to stay.
The average price of diesel fuel hit an all-time high at $5.82 in June. While prices for both gas and diesel fuel continue to fall slowly, diesel continues to be higher than last year. The average price (as of December 2022) hovering around $4.68/gallon.
Apart from fuel, insurance costs and maintenance costs continue to rise. According to a report on rising insurance premiums from the American Transportation Research Institute (ATRI), rising insurance costs impact all types of carriers, but especially small- to medium-sized fleets who spend three times as much on insurance premiums than larger fleet companies.
Graphic provided by ATRI.
These higher costs force fleet managers and drivers to find new and efficient ways of operating. This includes implementing new technology that will improve fuel efficiency and maximize mileage for truckers. Fleets will also focus on mitigating any truck maintenance, and route optimization for faster shipping and more accurate delivery times.
3. Supply Chain Delays Will Ease, But Continue to Linger
2022 also saw residual disruption in the supply chain caused by pandemic shutdowns. Container ship backlogs have slowly eased throughout the year. This creates less wait time for shipped goods to deliver, as well as less money spent on drivers waiting idly by for their products.
What we will continue to see for 2023 are disruptions in the flow of goods. This includes component parts such as microchips used in manufacturing products like cars, computers, and other technologies. This is concerning for truck parts - more specifically, newer trucks that require microchips in order to perform functional capabilities.
Fleet managers should expect added turnaround time on parts coming from foreign countries. Especially China, whose recent resurgence in COVID-19 cases continue to impact the flow of goods to the US and around the world.
4. New Technology and EV Trucks Adds Sought-After Benefits
One of the biggest trucking trends includes the rollout of newer and smarter trucks and trucking technology. These improvements help mitigate semi-involved crashes, which increased by 13% in 2021 according to the National Highway Traffic Safety Administration (NHTSA).
Many of these new features include higher fuel efficiency rates, collision warning lights, digital mirrors and cameras, and other vision enhancements made to improve driver safety.
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Investing in this newer trucking technology gives truckers added security and fleet managers less headaches when it comes to reducing risk on the road. 2023 will likely see further investment in these technologies by fleet owners and managers.
Another hot-topic trucking trend for 2023 is the anticipated conversion to electric trucks and the popularization of EVs. Major companies like Kenworth, Peterbilt, Volvo and Tesla have either started the R&D for these new class 8 models, or have already manufactured and delivered these vehicles to select customers. Some experts are anticipating the rollout of these new trucking models as soon as the end of 2023!
5. Production Locations Will Change or Be Added
As some fleet companies decide to merge with others instead of going under, production locations plan to move or build in newer areas than where they originally operated.
Experts believe specific carriers are expected to relocate to certain states:
- Texas, Illinois, and Ohio are shaping up to be the states where dry van production companies will relocate to.
- Reefer production companies prefer the states of California and Illinois.
- For flatbed vehicles, Texas and Pennsylvania continue to be strongholds for these production locations.
Looking Up in 2023
Despite the uncertain conditions, 2023 looks to be a year of potential turnaround for the trucking industry. As the backbone of the American economy, truckers play an important role of transporting goods across the country. With these new advancements and the change in consumer behaviors, there looks to be a long road ahead for truckers and the transportation industry as a whole.
