A drop in demand and a soft economy is forcing a lot of trucking companies to start making cuts to their fleet.

“Big trucking companies have spent the second half of the year shrinking their fleets in hopes of changing an imbalance between the supply of rigs on the road and tepid shipping demand that has flattened industry earnings,” say Erica E. Phillips and Paul Page of the Wall Street Journal in an article they recently posted about the subject.

So just how bad is it going to be for the industry going forward?

Data is Still Being Compiled

As the Holiday’s are just around the corner, typically one of the strongest seasons for the trucking industry as consumers begin their shopping frenzy, we’ll get to see just how much of an effect paring down the fleets have had on trucking rates.

“They will learn in the coming weeks, as retailers stock up at stores and distribution centers for the holidays, whether efforts to slim down capacity have produced the rate increases that trucking companies say they need to increase profitability and to expand fleets next year.

Trucking-industry reports in the coming week will take the pulse of a market at a critical point in the fourth quarter, when companies look to build off momentum in the consumer and manufacturing arenas to set business plans for 2017,” the WSJ article reads. “Industry data groups ACT Research and FTR are due to report this week on new heavy-duty truck orders for companies in October, a critical month for setting fleet plans for the coming year after several months in which orders have plummeted to historically low levels,” they added.

Not a New but a Growing Concern

The current state of the economy is something that is always on the mind of the trucking industry. After all, if people aren’t shopping, there isn’t much of a need for trucks. Still, while this isn’t a new concern it’s slowly been creeping up the list. According to the American Transportation Research Institute (ATRI) annual index of industry concerns, the Economy has climbed from the 9th position (2014) to the 5th, hitting an index rating of 39.9. Since the economy had a strong post-recession period it warranted less concern.

However, as the economy starts to weaken, the over capacity in the trucking industry is driving rates down, forcing the industry to suffer the blow to their profitability, hence the need to scale back the fleet.“DAT Solutions LLC, which measures freight rates in the industrial-trucking market, will report the next week on whether carrier efforts to rein in capacity amid tepid demand are pushing up prices as hoped. DAT says prices for spot-market freight hauls and shipments moving under long-term contracts have been slipping for most of the year, and that rates in September were down 6.4% from the same month a year earlier,” say Phillips and Page.

Looking for Solutions

While the numbers aren’t in just yet for how bad the industries situation is, there are a few possible solutions suggested by company heads polled by the ATRI’s survey. Aside from cutting down on fleet size as an attempt to recoup some of the loses, another proposed solution is to support policies that will stimulate the economy. Over 14% of the respondents would like to see more such policies go into place. Conversely, nearly a third of the respondents (32.2%) would like to see reform in the regulations that target the trucking industry, specifically a removal of the ineffective policies that do little else but drive up operations expenses.

Fossil fuels are not only notoriously expensive but also produce a horrendous amount of carbon dioxide which in turn gets released into the atmosphere.

In a study

 conducted by the American Transportation Research Institute and the University of Michigan, over 100 fleet managers that responded to the survey said they’ll look for better efficiency in driving and training before they would consider turning to fossil fuels. The question is, if truckers are unwilling to switch to alternative fuels then what can be done to improve fuel economy while cutting back on carbon emissions. The answer? Quite a lot actually.

Improving Fuel Efficiency over Fuel Type

There’s no getting around the fact that trucks are necessary as they carry upwards of 70% of all goods across our country. With that said, fuel is perhaps one of the biggest costs for the transportation industry, and in many cases takes up approximately 24% of the operating expenses with the average mile per gallon a mere 6.5. So if these companies aren’t willing to move over to alternative fuels, then improving fuel economy will have to be the solution. Here are just a few of the solutions that have been found to increase fuel efficiency.

Aluminum Frames- 

This covers everything from wheels to truck frames themselves, but when you cut down on the weight, the truck itself will inevitably use less fuel. While the frames have been made out of aluminum for some decades now, some trucking companies, about 9 in 10, are also shifting over to aluminum wheel which also helps to cut down on the weight without sacrificing too much of the necessary tensile strength.

Automatic Monitoring- With the new found power of computer processing, truckers are getting a good bit of a technological overhaul. This runs the gamut of speed limiters which cut down on excessive fuel consumption to automatic tire pressure monitoring and inflation. Under inflated tires cut down on fuel efficiency, so having a system that automatically inflates the tires when they get too low on pressure can be a quick and rather uninvasive means of improving efficiency. As it stands, approximately 82% of trucking companies use speed limiters, 60% use tire pressure monitors, and 50% use automatic inflation systems.

Eco-Driving Training- 

Another method of fuel economy that is being employed is to train driver’s in Eco-Driving. Eco-driving is a school of thought that employs a variety of driving techniques such as gradual acceleration and braking as well as the optimal time to shift gears. Not only does this cut down on some of the wear and tear that occurs from everyday use but also serves to boost fuel efficiency. Eco-drive training is one of the slower systems to grow, with only about 50% utilization, but it also has one of the biggest potentials for growth. About 25% of trucking companies interviewed are considering implementing training within the next one to two years.

These are only some of the methods that can be employed without the need to completely overhaul a fleet. There are still more options which help to cut down on wind resistance and allow the truck to move smoothly without so much need for acceleration.

Size Matters

Ultimately one of the biggest hang ups for fuel efficiency, comes down to the size of the company. Larger fleets will have an easier time phasing out older trucks and bringing in new trucks with hybrid or electric systems. However, the majority of the trucking industry is made up of small to mid-size companies, where such replacements aren’t always viable.

Using alternative methods to boost fuel economy is essential to success — not only with the EPA’s phase two fuel efficiency and emission standards that went into effect in August, but with the cost of fuel beginning to creep up again. Truckers will have little other option in the future other than striving toward improvement.As it stands, the most effective means of boosting fuel efficiency (in terms of return on investment, as reported by companies surveyed) are:

• Aerodynamic treatments (such as skirts and wheel covers),
• Idle reduction technology (IRT),
• Automatic transmissions.

However, every improvement made will add to efficiency and cost reduction in the long haul.