2024 Will Be Tough for the U.S. Trucking Industry: Here’s How Carriers Can Adapt

2023 was quite a ride for the trucking industry. We faced rising fuel prices, economic roller coasters, freight recessions, driver shortages, and a battle with inflation, which just wouldn't quit. It's been tough out there.

As the founder of a startup with dispatch services in the U.S., I've got a front-row seat to the challenges facing our industry. My company aggregates over 100,000 loads daily, so I've seen firsthand how these trends are impacting carriers.

My conclusion: To survive, a trucking company needs to know what’s coming, be flexible, and use modern tools. Here’s how to adapt to the trends that will shape the U.S. trucking industry.

Use Data to Avoid Losses

Everyone in the industry is feeling the squeeze.

The trucking industry is facing its toughest challenge since 2008. Truckstop reported that in 2023, 77% of owner-operators had to book shorter routes due to rising costs, while 65% had booked fewer loads altogether. The American Transportation Research Institute ranks the economy as the biggest industry challenge, followed closely by truck parking availability and fuel prices.

At the beginning of 2023, our inner data of aggregated loads predicted potential industry issues. I realized that margins would fall, and many operators would go bankrupt. That happened to Convoy, Yellow Corp, and other big players who were shutting down and laying off staff en masse.

To be among the survivors, we took a risk to change our business model and focused on using AI tools. Being able to predict what’s coming helped my startup generate profit for three months last year. Now, we are once again close to breaking even.

Carriers who don't use analytics will continue to run loads at a loss. With data analytics, truckers can identify the most efficient routes, predict load volumes, delivery times, market trends, seasonal fluctuations, and many other factors.  Previously, this information was only available to large companies. Now even small carriers can gain insights with tools like Truckerpath, DAT, or Cargofy (disclaimer: I'm biased, it's my startup).

Switch to a Subscription Model

It’s the era of the carriers who offer Logistics-as-a-Service.

Looking to cut costs, e-commerce and other companies are seeking LaaS tools to manage their transportation services through cloud-based platforms. Instead of handling the logistics themselves, they prefer to outsource it to a third party. And this is where you can come into play.

I saw firsthand how well it works. Launching a subscription-based model in 2023 allowed us to generate a more stable revenue stream.

However, the benefits of LaaS extend beyond financial stability. By adopting a subscription model, carriers improve their efficiency by implementing transportation management systems (TMS), accounting software, and data analytics.

They can better analyze financial data, gain insights about shippers’ debts, and manage contracts –– all in one place. Also, carriers can offer value-added services to shippers, such as real-time tracking and visibility.

Start Using AI As Much as Possible

AI tools increase truck drivers' revenue by an average of 17% per year, our internal analytics shows. By analyzing big data on supply-demand dynamics, seasonality, and freight availability, AI algorithms can guide truckers toward high-paying loads that minimize empty miles.

Predictive matching helps carriers dismiss loads that lead to deadhead miles and wasted time.

AI is also transforming the role of truck dispatchers. Instead of making numerous phone calls to find viable loads, they use AI and get pre-matched opportunities with calculated rates. With AI’s help, an individual dispatcher can now efficiently handle 2-3 times as many trucks.

I don’t believe AI will fully replace the human interaction required for negotiations. But, it dramatically reduces manual work and empowers dispatchers to secure better loads in a fraction of the time.

Trim Your Team (Sorry)

The trucking industry has seen its fair share of ups and downs when it comes to employment. When times are good, companies hire thousands of workers, but when the market takes a turn, layoffs can be just as common.

The American Trucking Associations reported that, in 2022, a whopping 8.4 million people worked in trucking-related jobs across the economy. 3.54 million of those people were truck drivers.

In 2023, many large companies such as Flexport, Uber Freight, Flock Freight, and Lipsey Logistics had to trim their teams. As the founder of a trucking startup, I also had to make the tough choice to downsize my team by 30%. This decision was not taken lightly, but it was essential to ensure the company's survival. Otherwise, my company would go bust, and I’d have to dismiss 100% of my staff.