Inflation and the Trucking Industry – Cause and Effect
It would be great if the trucking industry could exist in a bubble where all you needed to worry about where the logistics of moving things from one place to the next. The world is not that simple, unfortunately, and there are many other factors that come into play in this business. One such factor, inflation, and how it impacts the trucking industry, will be the focus of this article.
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A Quick Introduction
You don’t need to be an economist to understand that inflation has an impact on daily life and business. If you aren’t familiar, inflation is simply the loss of purchasing power within a currency. For example, if you could buy a certain set of goods or services for $1,000 last year, and the same set of goods and services would cost $1,050 today, that would be the work of inflation.
Impact on Trucking
With that background in place, it’s pretty easy to see that the impact on trucking won’t be a good one in most cases. Generally speaking, the equipment you need to run your business is going to get more expensive as inflation continues to go. If you aren’t able to locate additional revenues to pair with those rising costs, what’s left at the end of the year is going to decrease. Fortunately, for some drivers, it will be possible to recoup these increased expenses through higher costs, but that almost certainly won’t be true for everyone.
Hands Are Tied
As frustrating as it is, there isn’t really anything you can do about inflation or its impacts on the trucking industry. Of course, you can be working hard to earn good work that pays enough to meet your costs, but you were doing that already anyway. Otherwise, it’s largely a matter of riding out a period of inflation and hoping for stabilizing costs moving forward.
Another Factor to Consider
In addition to the notable impact that inflation is having on the trucking industry, there is also the shortage of truckers to consider. At this point, there simply are not enough truckers to move goods around the country, and that trend seems set to continue – if not worsen – in the years to come.
How the trucker shortage impacts your business depends on the kind of operation you run. On one hand, for a single owner-operator, this can be good news – demand is sky high and charging high rates should be a slam dunk. If you run your own business as an owner-operator, this lagging supply of drivers may be able to drive your rates up to offset the cost of equipment and other expenses that we mentioned above.
With that said, the story will not be so rosy for a transportation company running a fleet of trucks. Those trucks only make money when they are on the move, and there are not enough drivers to keep everyone’s trucks in motion. So, where owner-operators may benefit from high demand, fleet operators could struggle to find capable drivers to get the job done.
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