After a year of plenty of ups and downs, motor carriers and freight brokers are bracing for 2017 and wondering what to expect. And how will the new presidency affect the freight industry? Here’s a review of some of the most central trucking industry trends to keep in mind for 2017.
Regulations have been on everybody’s mind over the last few years and 2017 will see a number of new regulations come into effect, while others that have not yet been introduced and accepted may end up not seeing the light of day.
One regulation that has gained attention is the implementation of the Unified Registration System (URS). Its deadline was extended yet again because the government needs additional time to securely migrate all the data. The Federal Motor Carrier Safety Administration will make an announcement at some point in January 2017 about the next phase, which concerns businesses already registered with the FMCSA.
All new brokers, carriers, and others who are required to register with the FMCSA have been able to do so through the URS since December 2015. This has even included the posting of broker surety bonds and all other aspects of the application process.
The electronic logging device mandate is another rule that grabbed industry attention this year. Even though the Owner-Operator Independent Drivers Association recently requested a rehearing at the US Court of Appeals on the ELD rule, it looks like the mandate is still on. This means as of December 2017, trucks will need to be equipped with ELDs that will log the movements of the truck.
Greenhouse gas emission standards are one of the rules that are expected to be overturned once the new administration steps in. If implemented, these standards would require manufacturers to reduce the emissions from trucks, buses, and cargo vans in a number of phases by 2027.
Another controversial rule that may not see daylight is one that would require heavy-duty trucks to be equipped with speed-limiting devices. While the American Trucking Associations has said it supports speed limiters in principle, it has come out against the rule because of the way it is designed. The Western States Trucking Association and OOIDA have also come out strongly against the rule.
While the hours-of-service rule has been around since 2013, it needed to be fixed after a 2015 bill unintentionally introduced a loophole that removed the 34-hour restart requirement. While the 2017 government funding bill sought to remove the loophole and fix the issue, clarity has not been achieved.
The ATA and the FMCSA have quarreled about what exactly the requirements for hours of service are, and as of now there is no final verdict on the issue.
One issue to keep an eye on in the coming year is infrastructure development. If president-elect Donald Trump’s 10-year $1 trillion infrastructure proposal goes forward, this is expected to influence the industry in positive ways.
This, along with a consumer spending and manufacturing expected to pick up, should help stabilize the ping-pong effects of 2015. Industry analysts expect the freight market to improve by the middle of next year. Until then, the volatility currently defining the market may persist.
Speaking in numbers, research company IBISWorld expects a 2.4 percent rise in US trucking sales in 2017, equal to $186.6 billion. They have also predicted an annual growth of 2.1 percent, until 2021.
The trucker shortage remains one of the central issues of the industry, with no end in sight. In fact, it is expected to become even more critical in the coming year, especially if retail suddenly expands. This could mean trouble on a number of fronts, such as higher rates for shippers. Due to demand exceeding capacity, at least a 2 percent increase in less-than-truckload rates can therefore be expected.
Finally, surplus inventory, which has been filling warehouses since 2014, is also expected to play a role in the overall difficulty carriers and shippers alike may experience in 2017. How this will be handled remains to be seen.
Are there any other important trends in 2017 which we should add to this list? As a broker or carrier, is there anything that you think is missing here? Let us know in the comments!
Vic Lance is the founder and president of Lance Surety Bond Associates.