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Trucking secrets in USA trucking are usually some facts most of us know or think they know but usually don’t pay attention to that at all. Well hidden in the depth of industry. Trucking industry hides some facts that ordinary people that haven’t spent a decade in this industry find very hard to reach.

Like every other business or industry so does trucking there is a lot of things that may look easy and simple but that is just until you dig a little deeper and under the surface the things are not that easy as they look – thats what we call trucking secrets. That was one of the main reasons I wanted to write this list and create a central point where people from outside of the industry can get an insight how this industry looks and operates.

1. USA Trucking Secret: Trucking Is Really Old and Really Big In USA

Yes, indeed trucking industry has its roots ever since the first car was build at that period very quickly the first truck showed up on the streets. It was all the way back to the beginning of the 20th century when automotive industry started their first steps to massive market penetration.

Trucks showed up and very quickly the massive truck production was in place adding more and more trucks to the streets on a daily base. First transportation hubs started to create (Chicago) and industry was on the path to become a giant. And that sure happened and now trucking industry is giant responsible for 5% of USA annual GDP or around $700 billon annual worth.

There is around 1,2 Million trucking companies operating 15 million of all kind of different trucks all over the USA and 3,5 million of those trucks are Class 8 Trucks or the big ones we see the most on the highways. It is huge and it is massive – 70% of all goods in USA are transported by trucks. Without trucks America stops living in just 21 days.

2. USA Trucking Secret: USA Trucking Is Expect To Grow Big In Next 10 Years

As you were able to read in the previous paragraph and see what is the size of the USA trucking industry it is even more incredible that trucking industry will grow over the next 10 years by 21%. Yes it is incredible that some industry that is so huge and big can become even bigger.

The reason for that lies in the fact that we buy more and more stuff ever years and that average number of items purchased per person in one year is growing constantly. More and more things are available trough the online stores (Amazon, Jet, Walmart Online, Alibaba) and people are becoming used to that kind of purchasing.

That lead us to dramatic increase in parcel shipping over the last 5 years and for that reason more and more trucks are required t o serve people and their newly developed purchasing habits.

3. USA Trucking Secret: Trucking Industry Is Slow With Changes

It is a giant and it is completely normal that changes are slowly coming into this industry because in reality every big industry changes slowly and that is OK. Maybe. A lot of changes are happening in the last few years and a lot of industries are being disrupted and changed completely how we rent place to stay (AirBnB) or how we drive in Taxi (Uber) and there is some signs of changing in the trucking industry as well.

There is some startups that are on the mission to disrupt the trucking industry and the way trucking industry works but we need to know that there is a lot of money in this playground and big players just wont let small startups to disrupt the industry and change it the way they want. It will be interesting too watch how this battle will end.

4. USA Trucking Secret: Trucking Giants Control The Industry

As written above, the industry is packed with giant players that pretty much control the industry and set the trends for the next short to medium period of time. There is at least 10 big players that have more than 10.000 trucks in their fleets (Yes, you read that correct) and that have impressive power in their hands.

Because those big players control the majority of the industry and set trends up and have a huge financial power it is not likely to think that they will sit and wait for changes to happen to them. Proactively they are fighting as well to hold their positions and be prepared for those small (at this moment) attacks coming from startups that want to change the way trucking industry runs business.

Already a lot of merger and acquisitions are happening and it is very interesting. The companies are joining business making from two big companies one giant. Seems like the big boys are becoming even bigger but just like I sad it is going to be very interesting field in the next five years.

5. USA Trucking Secret: Most Of The Business Is Done Trough Middleman 

This is the area where we can expect biggest changes or let me say it like this, in this area a lot of startups want to make changes that will make those middleman’s disappear.

But let me first explain to you how the business operates in 90% of the cases. If you are a small or medium trucking company owner and you have 50 trucks in your fleet to find the loads you are going to drive you are not calling companies you want to drive for. There is a broker in the middle that will give you the load. Company calls broker, broker calls you and you drive the load. Now you probably ask yourself why do we need the broker in the middle that is taking money from both of us? That’s the question all those new startups looking to change this ask too.

The middle broker takes money from both sides and it should disappear. But hold on, over the last 100 years of trucking those brokers become very powerful and very well connected and also we need to say they are doing their job perfectly. With them everything works and they are backed with billions of dollars in capital so is this change happen or it will just partially happen (only partial in my opinion).

6. USA Trucking Secret: There Is Big Truck Driver Shortage on The Labour Market

Yes, there is around 100.000 drivers missing in the trucking industry labour market. This creates a big mess on the market. Not only that there is lack of 100k drivers the thing is that there is a huge demand for well trained, responsible and good drivers.

This is constant problem in the last 10 years and a lot of discussions are opened on this subject without any good solution on the horizon. There is a huge industry in this driver training and driver hiring that is making a lot of money and would charge trucking company up to $3.000 if they find a driver to them.

The only solution for this situation is possible if the politics gets involved. Trucking industry needs decision where they could bring foreign drivers to the country and obtain them driving and working permits in fast and simple procedure. But then you open some immigration questions and that is always a hot politic topic. But if this is not solved trucking industry will not be able to answer the increase demand for transport.

7. USA Trucking Secret: Trucking Industry Is Not Very Profitable Business

This is another fact to handle. Being trucking company owner in the past would easily mean that you can make a ton of money and the profit per truck was really amazing. Also the average load price per mile were quite higher and the difference between costs and incomes were bigger.

But all those things have changed and now trucking company owners are heaving difficult time to cover all the cost they create. Also big problems are created because trucking has a low season during winter time were a lot of companies make debts that takes them 6 months to pay back during spring/summer high season.

8. USA Trucking Secret: There is a Lot of Competition

In the last 10 years there has been huge increase in truck numbers. A lot of new people entered into this business and also almost every trucking company expanded their fleet size.

Now if we now that a lot of trucks and trucking companies makes more competitive market landscape which as a consequence drives the load prices down. This is not something that is very easy to solve but the market power and invisible hand that controls the market is taking care of it.

You are able to see that in last 6 months more and more companies are unfortunately going out of business and file for bankruptcy just because there is a lot of trucks in the market. The cleaning of the market has started and I expect it to last for 6 months to a 1 year and that after that situation will get back to usual.

9. USA Trucking Secret: Freight Factoring Companies Make a Lot of Money

Also one of the giants in trucking industry that makes a lot of money. Usually the system works in a way that trucking company when delivers the load will get pay in 60 days. But trucking companies are not willing to wait for those 60 days and they want the money immediately within 5 days.

Then they turn to the factoring companies that will pay them the money they need to get for the delivered load immediately. After that factoring company will chase the shipping company for the money and wait for 60 days. Of course they are not doing that for free. For paying you money within 5 days instead of they will usually charge you with 2% – 3% of the total bill.

There is a lot of companies that think this is unfair in some way but the truth is that no one is forcing trucking companies to use the factoring services. If you want money in advance you need to pay for it. It is that simple.

10. USA Trucking Secret: Dispatch Department Plays a Key Role

Another thing that most of the people outside of this industry doesn’t know is that dispatch department is something similar to the sales department in any other ordinary company. Dispatchers work every day to find new loads for all trucks any company owns.

If they are good trucking company will have good paid loads and company revenue goes up and if they are bad company revenues will shrink. This department is crucial because their bad performance can ruin the company within few months since the trucking business profit margins are very low.

Conclusion

As you were able to see there is a lot of things and trucking secrets that may look simple and that you might know all about them but once you go deeper you discover that this may not be the case and they you still need some extra information yo call your self an expert. This article wont make you an expert but it sure you show the way trucking industry works and what are the usual practices in the trucking business and it will reveal some of the trucking secrets to you.

 
 
By Evan Lockridge


A decline in the amount of freight on the spot truckload market coupled with an increase in the number of trucks needing cargo,pushed rates down across the board, according to new weekly figures from DAT Solutions that are based on its network of load boards.

Overall freight availability fell 6.2% while truck postings increased 3.1% for the week ending August 13 compared to the previous week as the average diesel fuel price declined 0.4% to $2.31 per gallon.

The average dry van rate gave up 3 cents, hitting $1.61 per mile, which included a 1-cent drop in the average fuel surcharge. While outbound rates increased in Seattle and Allentown, they fell in Chicago and Atlanta. The average dry van rate is now lower than the June average for the first time in six weeks, a transition that typically occurs in the first week of July, according to DAT.

Likewise, the average reefer rate lost 3 cents, registering $1.90 per mile and is down 6 cents from three weeks earlier. Reefer prices rose in major markets in the Midwest, but were lower in the Northeast.

Flatbeds posted the smallest drop, just 1-cent and entirely due to a decline in the fuel surcharge, pushing the average rate to where it was two weeks earlier at $1.92 per mile.

Not surprisingly, with less freight and a hike in the number of truck postings, load-to-truck ratios fell in all three freight categories. The biggest was in the flatbed sector, falling 14% to 11 loads per truck. Flatbed load posts declined 11% last week while truck posts increased 4%.

The 7% drop in the van load-to-truck ratio happened as van load posts declined 4% last week and truck posts increased 3% yielding 2.5 loads per truck. Reefers were not far behind with a 5.5% drop. Reefer load posts edged down 3% last week while truck posts added 3%. That resulted in the load-to-truck ratio moving to 5 to 1.