BLOG

According to the American Trucking Association (ATA), over 70% of all freight tonnage moved throughout the U.S. is done by truck.  Importantly, the total amount of goods transported by truck has increased by an impressive 10% in the past year, indicative of a growing economy, increased consumer buying power, and a heightened demand to transport freight by land.

Most experts forecast considerable growth for commercial trucking in the coming years.  Although this is certainly great for business, how will the industry prepare for the increased load and ever-changing landscape?  Heightened demand for good-transport requires additional trucks, additional drivers, and better operational organization.  Much of this responsibility falls on the shoulders of the fleet manager.

 

The Role of the Fleet Manager

So what exactly is a fleet manager?  The fleet manager plays a central role within the transportation industry by handling vehicle procurement, driver management, mechanical maintenance, and record keeping.  Unsurprisingly, it requires highly qualified, highly experienced individuals.  Good fleet managers have solid project management skills, knowledge in finance and in mechanics, experience in business administration, and adequate people skills.

The responsibilities of this position are diverse and highly-demanding.  Additionally, the role is constantly changing with the economic landscape as well as advances in technology.  Let’s breakdown a few of the recent trends in fleet management, and gain some insight on where the position is headed in the coming years.

 

1. Driver Shortages

Driver shortage has been among the top concerns for trucking companies and fleet managers in the past decade.  According to another ATA report, the industry is currently in-need of an additional 30,000 to 35,000 drivers.  As the demands for freight transport increase and the number of new driver applicants continues to stagnate, some experts predict that the shortage may approach 250,000 by 2022.  A shortage of this magnitude could lead to serious and long-lasting problems, not only for the industry, but also for U.S. consumers and businesses who expect timely and reasonably-priced deliveries.  Chief ATA economist Bob Costello explains “On average, trucking will need to recruit nearly 100,000 new drivers every year to keep up with the demand for drivers, with nearly two-thirds of the need coming from industry growth and retirements.”  Unfortunately, younger generations of workers doesn’t see truck-driving as the venerable and liberating career that it once had a reputation for.  Shortages in drivers will be a major challenge fleet managers will be facing (likely) for years to come.

 

2. The Technological Boon

As we discussed earlier, fleet management requires skills and proficiencies in a number of diverse—and seemingly unrelated—fields.  Fortunately, this workload has been eased in recent years with the emergence of specialized fleet management software.  These computer-based programs help managers track vehicles, organize information, and even maintain records.  Fleet management software isn’t exactly new, however their growing level of sophistication is definitely worth noting.  For example, tech companies are beginning to offer management software that can track vehicles in real-time, monitor fuel and temperature levels, and record patterns in driver behavior.  Increased digitalization is definitely a trend to watch for in the coming years.  As tech companies offer more and more functionality, fleet managers will rely more on software to make data-driven, real-time decisions for their fleet (especially as the industry grows and more trucks, drivers, and deliveries are on the road).

 

3. Fuel Cost Expectations

The trucking industry is incredibly effected by fuel prices; even modest fluctuations in the cost of diesel can have massive effects on a company’s financial bottom line.  For that reason, fleet managers must know the forecast when it comes to energy prices.  The 2018 Kiplinger report on energy prices predicted the oil market will remain “jumpy” in the coming year.  This puts managers in a difficult position, as it’s challenging to predict company expenses when diesel prices are unstable.

 

4. Rate-Cost Expectations

For the past few years, rates for trucks have been steadily rising across the country, and experts don’t see this ceasing anytime soon.  These rate increases, albeit moderate and gradual, are primarily driven by the increased demand for freight transport.  For example, FedEx has increased their rates nearly 5% in the past few years, likely because of the growing economy, greater consumer buying power, and the emergence of the online marketplace.  Although the increase in rates isn’t dramatic by any means, it’s still an important factor to take into account when procuring and maintaining fleet vehicles.

 

So how will fleet managers handle some of the challenges that lay ahead in 2019 and beyond?  There’s really not one conclusive answer to that question. While considerable growth for the industry (which is what most experts forecast in the coming years) will likely come with increased costs, this doesn’t necessarily mean that commercial vehicle companies will be “priced-out” of business.  In-fact, quite the contrary; the increased demand only indicates how reliant the U.S. is on the trucking industry.

For fleet managers, the name of the game is awareness and adaptability.  In the coming year, managers should expect to see persistent driver shortages, increased diesel prices, and continued gradual growth of trucking-rates.  On the bright side, tech companies are beginning to cater to the fleet managers with incredibly powerful and versatile tools that can help make data-driven decisions to minimize costs and optimize fleet operations.

 

 

About: McPherson Oil is proud to distribute ExxonMobil products in the southeast including Alabama, Arkansas, Florida Panhandle, Georgia, Louisiana, Mississippi and Tennessee.