The trucking industry is in a precarious place right now. Despite a record number of new trucking companies opening shop in 2021, there is still a shortage of more than 80,000 drivers. Due to the pandemic, supply chains are almost all but broken. Delays of weeks or even months for some goods to reach their destination are the new normal. Now, diesel prices are reaching record highs, and truck drivers are fed up. Truckers warn Americans of empty shelves and complete stops in supply chains. One Maryland trucker claims diesel prices will lead to a mass exodus of truckers leaving the industry. After all, many drivers are taking cargo loads at a loss, and that business model is just not sustainable.
The Cost of Doing Business
Diesel prices on average hover around $5.72 nationwide and $5.66 in Baltimore. That’s up approximately 76% since last year, and some are dubbing this worse than the 1970s oil crisis. Truckers claim to spend more than $1,700 a day to fill their trucks. The cost of doing business has never been higher, and it’s especially alarming considering where the trucking industry is right now. The growing desire to automate and electrify the industry gives many new truckers a not-so-promising look at the future of trucking. Will they even need drivers if everything is automated in the coming years? This resulted in a trucker shortage in the industry. Even so, last year marked a record number of new trucking businesses.
Diesel Prices could Close Down Businesses
These new businesses are a direct result of many drivers’ going solo. They branch off from their big fleet and buy or lease a truck and are ready to go solo. It was a good year to do just that. However, now those new drivers are performing without a safety net in some of the most dangerous waters the industry has ever seen. This is because the new drives just don’t know how to quote a rate. They focus more on winning a bid than determining if a bid can earn them money. With gas prices the way they are, it’s hard to know exactly how much they need to charge to turn a profit. All of this is creating a competitive industry where there surely will be no winners. New carriers drive down prices, which makes being a motor carrier in today’s market unsustainable. Soon, many of those new motor carriers will have to shut down operations. There will be a mass exodus and even fewer drivers. This is already happening as many drivers have closed shop. If things don’t improve in the coming months, or maybe even weeks, we could see a serious crash in the industry.