Owner-operators and small carriers may feel that they are particularly susceptible to the fluctuations of the freight market. Pandemics, bad weather, natural disasters, supply chain disruptions, and driver shortages have become part of the status quo.
When these kinds of challenges happen, it’s the carriers and owner-operators who step up and offer support, traveling across the country to deliver much-needed freight in stressful times and even during major natural disasters. The freight industry doesn’t stop when challenges arise.
Many carriers are embracing new technologies to find freight, strategically plan their routes, secure higher rates, communicate with brokers and clients about delivery times, effectively manage their Hours of Service (HOS), and make running their small businesses simpler and more efficient than ever before.
Navigating the freight market shouldn’t be a mystery. Here’s what you need to know.
Demand in the freight shipping industry is in constant motion. As the year progresses, small carriers and owner-operators experience fluctuations in the freight market as a direct response to factors like seasonal demand, capacity, availability, and more.
This not only impacts freight rates, but for small fleets of only a few vehicles, this can make it hard to plan ahead and make the most of periods of high carrier demand. Knowing about these seasonal shifts can help small carriers and independent drivers take advantage of the great rates that come with these annual “busy periods.”
While the rest of the world may know the four seasons as spring, summer, fall, and winter, to those in the freight industry, the four seasons look more like:
Spring produce season
Summer food and beverage season
Christmas tree season
Peak retail season
These are very busy times of year for the freight industry, when carriers are in high demand; during these high-demand seasons, you can negotiate great rates in a favorable market. However, planning for seasonal surges requires the right tools and technologies in place, so you can make the most of the market and stay competitive.
Hauling freight can become particularly dangerous in certain climates and during severe weather events. Inclement weather can reduce visibility, impact road conditions, lead to route changes, and more. The Federal Motor Carrier Safety Administration (FMCSA) shared that “extreme caution must be exercised when hazardous weather conditions adversely affect visibility or traction as it relates to a motor vehicle.”
Many kinds of poor weather conditions can impact your operations, including:
High winds, tornadoes, and wind storms which can push and even topple top-heavy tractor-trailers.
Heavy rain, ice, and snow, which can impact visibility and road conditions and lead to hydroplaning, loss of vehicle control, and deadly collisions in sub-freezing temperatures.
Thunderstorms: Lightning or thunder can be startling, and potentially distracting, which can lead to losing control of your truck.
Fog: When it’s foggy out, you may face poor visibility. It’s crucial to use headlights and taillights correctly in foggy conditions so you’re able to see other motorists, and they’re able to see you.
Even if inclement weather is only happening in one region of the country, it can quickly impact the entire, interconnected freight industry. Bad weather can cause all kinds of shipping delays, cost fluctuations, equipment damages and more effects that are bad for business. Knowing how to handle dangerous road conditions in inclement weather is critical to your safety, and staying in constant communication with clients and brokers when inclement weather causes delays is essential.
Small carriers and owner-operators that have worked through natural disasters know that these events can have a major impact on getting freight to its final destination on time, even if you’re not working in an area directly affected. If you do find yourself navigating through a natural disaster, it can be very dangerous and even life-threatening.
Natural disasters include events like:
When these natural disasters occur, people in the affected areas are often told to either shelter in place or evacuate, depending on the severity and type of disaster. Carriers, on the other hand, often have to drive into these natural disaster areas to deliver important, sometimes life-saving, shipments and are some of the first to step up and come to others’ aid when disaster strikes.
50 percent will drive in areas experiencing wildfires
57 percent will drive in winter storms
65 percent will drive in areas anticipating a hurricane
55 percent will drive in areas experiencing flooding
71 percent will drive in areas experiencing extreme heat
On top of preparing for disasters, carriers are crucial for responding to them as well. Carriers that prioritize safety and know how to operate in emergency situations can provide life-saving materials, while also earning competitive freight rates that can ultimately help their business grow.
It’s no secret that the COVID-19 pandemic affected just about every sector and market of the global economy, and the freight industry in particular is still experiencing the effects of COVID.
Small carriers and owner-operators, the vast majority of whom had no disaster plan in place prior to the pandemic’s onset, have faced several challenges because of the pandemic.
These challenges include:
Disrupted routes from closures of warehouses and distribution centers
Rest area closures
Disruption of industry-dependent freight, like the food industry
Driver and equipment shortages
But it wasn’t all bad news for the industry as a whole. To combat labor shortages, many carriers have offered better rates to attract new drivers. And thanks to the shortage, owner-operators and small carriers are better able to find freight and negotiate higher rates.
Additionally, the pandemic brought a wave of technological adoption to the freight industry, with more carriers using technology to secure freight, find routes, and communicate with their customers.
Some of the trends and challenges anticipated for the coming year include:
COVID-19-related driver shortages due to early retirements, lack of access to commercial driving school training, and a larger shift in the national workforce. It’s estimated that the shortage is up over 30 percent compared to driver constraint figures reported in 2019.
The Federal Motor Carrier Safety Administration’s (FMCSA) Drug and Alcohol Clearinghouse program is geared towards creating safer roadways; a number of drivers have been taken off the roads due to violations.
Continued widespread supply chain disruptions that have impacted the economy. Sales were up by 15.8 percent in July of 2021 year-over-year, but with fewer drivers, factory shutdowns, and materials shortages, an already fractured supply chain is feeling the effects of COVID-19.
Climate change will likely lead to more severe weather events and natural disasters in 2022. This impacts the supply chain, takes a toll on safe roadways, and can also mean last-minute re-routing, HOS waivers from the FMCSA, and higher rates subsidized by the government to provide relief in disaster areas.
Ongoing economic fluctuations thanks to COVID-19, inflation, labor shortages, and shifts in consumer spending, which can all affect freight rates and driver demand.
Carriers can prepare for these challenges by leveraging technologies that deliver personalized freight recommendations, provide platforms for easy communication with customers, and prioritize transparency.
Articles circulated the web in the summer of 2021 telling stories about Sisu Energy, a Texas-based company, that was offering to pay new drivers $14,000 a week ($728,000 per year) due to a nationwide driver shortage. The story even made its way to Newsweek. However, this story was a bit misleading. Sisu Energy works with independent contractors who must have special certifications to haul frac sand, and are responsible for their own vehicles, insurance, fuel, and more.
Despite Sisu energy’s job advertisement being rather misleading, their claims of a driver shortage set off a nationwide panic.
After a thorough investigation, the Bureau of Labor Statistics found that the “driver shortage” isn’t exactly what it seems. Because the trucking industry is so intertwined and affected by external factors, whether that be shifts in types of consumer spending, natural disasters, or countless other forces, it experiences complex ebbs and flows. The term “driver shortage” is often used as a catch-all for nuanced industry issues. So, while there may be a real labor shortage some years, at other times “driver shortage” may be used to explain away larger industry problems.
COVID-19 has definitely taken its toll on the freight industry and its access to viable drivers. Certain industries including gas and fuel, lumber, and stainless steel have experienced such severe shipping bottlenecks during the pandemic that some recruiters working for freight transportation companies have started looking for drivers outside the U.S.
The need for workers is weighing heavily on both large and small carriers, and freight operators are scrambling to raise wages to get the drivers they need to stay on the road. It’s hard to pinpoint a single reason or cause for this labor shortage. However, drivers are showing a strong preference for jobs and positions that allow them to earn more while also spending more time with their families.
Moving forward, enticing new drivers to take employment will be all about putting the power in their hands. Carriers and owner-operators will be looking for opportunities that allow them to be their own boss, create their own schedule, and manage their own business on the go.
COVID-19 has led to many ups and downs in the trucking industry since its onset. The supply chain has continued to be rather sluggish throughout 2021, which has led to uncertainty for carriers. It’s unlikely these challenges will change any time soon.
The high cost of raw materials has impacted manufacturers, hurting their businesses and affecting their profits. While the materials shortage didn’t necessarily impact carriers in 2021, it could easily affect them in 2022. Because the cost of raw materials was so high, manufacturers are producing less, which will likely lead to a shipping deficit. Carriers should also remain wary of how raw material costs will impact the production of trucking equipment; it may become more difficult to acquire necessary parts for truck repairs and maintenance.
If there’s one thing that we’ve learned since the onset of the pandemic, it’s that everything can change overnight. There was no predicting just how the spread of the COVID-19 virus and its subsequent variants would impact the entire globe. For the freight transportation industry (and those who rely on it), this meant major disruptions in the supply chain.
Supply chain disruptions can happen for all kinds of reasons, including:
Route disruptions and transportation breakdowns
These disruptions can impact small businesses, and while you can’t fully predict supply chain disruptions, you can prepare for them. Developing an emergency management plan and leveraging technologies that help you to avoid route disruptions, share updates on delivery times, and see current fair market rates for freight, will help you succeed in the face of supply chain disruptions.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.