The effects of inflation are being felt worldwide and in all industries. However, the trucking industry is being particularly hard hit, and in turn, that’s affecting everyone as everyone depends on trucking.
A combination of economic problems is causing shortages while lowering the value of U.S. and foreign countries. Pent up demand from the pandemic led to an explosion in demand for shipping, while it’s taking industries time to get back to normal production after shutdowns. The Federal government paid out a significant amount of money in stimulus packages to American people and businesses, while many other countries had similar aid packages. The war in Europe has increased pressure on already stressed supply chains, especially fuel.
All industries are feeling the pinch, especially the trucking industry. The combination of inflation and supply chain issues has affected every major expense, including equipment, fuel and labor costs. While the general annual inflation rate is between 8-9%, new equipment prices have risen 20-40% in the past 18 months, while used equipment prices have more than doubled. Tires have been the least effected, but they’ve still risen in price by 20-25%. Fuel costs have doubled in the past 6 months. These conditions force companies to raise prices on freight to keep up with rising expenses. In turn, this raises prices on delivered goods and weakens consumer demand.
These pressures are making it hard for equipment suppliers to keep pace with demand. A representative of Craftsmen Utility Trailer said the company is under pressure on all sides. “This has added a complexity to doing business that we have not dealt with in decades.” The company faces major supply chain challenges sourcing the steel, aluminum, foam and trailer components. However, they said their top priority is keeping their employees happy. It’s imperative that the company maintains their staffing levels, so they can keep the supply of aftermarket parts flowing. This helps their customers keep their current equipment on the road.
This level of inflation adds a level of complexity to business that we have not seen in decades.
