You may recall what we said last spring about the tough times in the trucking industry: a business which really cannot seem to get a break, between the high fuel prices in good times and the dramatic slowdown in demand during tough times (when, by the way, fuel prices often remain pretty high).
Now truckers have something else to keep them awake at night. Investor Warren Buffett’s recent $34 billion purchase of Burlington Northern Santa Fe, the nation’s second biggest railroad, has — at least for the moment — helped to christen railroads the freight transport vehicle of the future, threatening to marginalize trucks.
Now, first of all, let’s be clear that railroads will never eliminate the need for trucks. Take the most extensive rail network conceivable, and it will still come up short delivering goods from the source to the final destination. Of course, it’s possible to see ways that shipping by train is superior to trucking, and vice versa. But for the most part, it’s an apples-to-oranges comparison. Trying to compare the two industries would be like comparing an aircraft to a cruise ship.
Still, the fact that the country’s most prominent investor has put a lot of money behind rail lines doesn’t help raise the public’s appreciation of trucks and the necessary function they provide. And, at a time when so many truckers are going out of business or struggling to make any money at all, it seems fair to ask how the industry might improve its competitive position.
We know there are many variables, such as fuel prices and the volume of goods being transported, that truckers really can’t control. Every industry, however, must do what it can to be as efficient as possible.
This news story about the newly-formed North American Council for Freight Efficiency (NACFE) argues that the fragmented nature of the trucking industry has made it difficult for small operators to identify and adopt the best products to assist with route planning and minimize the hauling of empty containers.
How can this be so hard when there is so much GPS and supply chain technology out there? Consider this video of truckers at NACFE’s inaugural meeting, discussing how there is just not a lot of money available to risk experimenting with a technology that may or may not pay off. The typical independent trucker has a mountain of expenses, including health insurance, that leaves little or nothing left for discretionary spending.
Still, truckers have made progress. Consider Exhibit C, which offers some examples of the proactive steps truckers are already taking today to improve fuel efficiency.
It certainly is not easy being a trucker. But truckers provide an essential service and are working hard to address the challenges their business faces today and tomorrow. A domestic energy policy that would help them control costs would certainly provide some badly needed relief.
