The Economic Trucking Crash of 2008
The 2008 economic crash had many casualties and the trucking industry was no exception. Many small and medium sized over the road trucking operations closed down and sold their trucks off. Prior to the 2008 economic meltdown the trucking industry was dealing with the never ending problem that never goes away for the trucking industry, the shoratage of qualified drivers.
The trucking industry has the highest turnover rate of any career. There are many reasons but most say the long working hours and or being away from home for far too long or simply not being compensated adequately for these sacrifices leads drivers to seek other job opportunities. These issues will always be a part of the trucking industry so driver shortage seems to be a problem that will not be going away any time soon.
Supply and Demand
Supply and Demand are very basic elements of Economics 101. When a product or service is in over abundance the prices drop and vice versa. As the economy began improving and manufacturing ramped up the need for trucks to ship started to increase. Many of the businesses that survived the economic crash hadn’t realized that so many smaller trucking companies had closed their doors. Many shippers didnt know that they relied so heavily on the smaller operations to ship their products. Many shippers would soon find themselves paying more fortrucking serices than ever before. With so many trucking companies out of business the few that remained raised rates to never before seen levels. This changed the game and flipped the script on shippers as the truckers were now in control.
Truckers are in the drivers seat
Trucking companies have always felt that rates were depressed and to some extent they are right. Many saw this as an opportunity to raise rates across the board and hopefully keep them there so as to increase profits. When the cost of a manufactured product rises the increase is always passed along to the consumer. This will be evident in everything from clothing to food in the immediate future and all commodities will be affected from the jeans you wear to the food you eat will cost more. The average will be paying as muchas 15 to 20% more and it will be because of higher transportation rates. As time goes on there will be new trucking companies that will go into business and help alleviate the capacity issues in some parts throughout the country but I highly doubt that we will see the same amount of trucking outfits as there was prior to the economic bust of 2008. This modern day depression will be rearing its ugly head for some time to come and we will all pay for it. Higher prices are here to stay and there is not much we can do about it.