In 2024, freight industry executives will closely monitor rising operating costs, technology adoption, and workforce retention issues while waiting for freight demand to rebound. Since Yellow Corp.'s bankruptcy last summer—the largest in freight history—carriers have continued to compete for market share, and many companies will welcome new employees, new trucks, new terminals, and new customers.

Industry stakeholders will push to see the repeal of the federal fuel excise tax, permanent truck parking funding, and broker fraud protection asbipartisan consensus issuesin the presidential election year.

These trends will all weigh on Webb Estes' mind—his first year as president and chief operating officer of Estes Express Lines has been eventful.

The carrier acquired24 Yellow terminalsand providedrecord raises to employeesduring last fall's cyberattack. This month, the company added 12 electric Freightliner eCascadias ordered in 2019 in California and installed solar panels at multiple terminals.

Witnessing 22,000 Estes employees spring into action after the cyberattack gave the company president a core lesson that will stay with him into his second year and throughout his career.

"I have a very dedicated, passionate team," Estes said. "It takes all of us working together."

Keeping a close eye on rising costs

According to the American Transportation Research Institute, the average marginal cost of trucking in 2022hit a record $2.25 per mileOperating costs remained high last year, and the likelihood of a significant decline this year is slim.

That is one reason the American Trucking Associations continues to push for the repeal of the federal fuel excise tax. The association says the move could save about $25,000 per tractor while promoting the adoption of newer, cleaner trucks.

"This money has a huge impact on the success or failure of a business," ATA President and CEO Chris Spear said in an interview. "I am optimistic that this will significantly improve operating costs for every member."

Trucking operating costs hit record high in 2022

Trend in per-mile trucking costs, including driver wages, equipment costs, tolls, and fuel, since 2011.

While waiting for a freight rebound, carriers will likely continue to closely monitor fuel, labor, lease payments, maintenance, and other costs, focusing on any potential savings.

"Truck drivers are in a tough spot right now," Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association, said in an interview.

Focusing on retention amid labor turmoil

Although the decline in freight demand haseased complaints about driver shortages, and some companies have laid off workers to adapt to falling revenue, labor remains a core issue that freight executives need to continuously address regardless of market conditions.

If the freight industry hopes to avoid the kind of work stoppages that plagued automakers' operations last year, 2024 has already been disappointing. In the second week of January, more than 130 US Foods truck drivers in the Chicago areawent on strike, saying the company failed to meet their demands during negotiations.

When Yellow collapsed, the Teamsters union lost more than 22,000 members. But in a year of active union activity in the U.S., the Teamsters conducted contract negotiations with TForce Freight and ABF Freight, securing labor agreements last year for members at the two remaining major unionized less-than-truckload carriers. A 39-day strike by the United Auto Workers at Mack Trucks brought a new five-year contract for nearly 4,000 workers.

From contract negotiations, pay raises are far from the only demand of workers. They also want protection from job automation and limits on how employers use tools such as driver-facing cameras.

The TForce Freight contractprohibits the use of cameras for discipline and also bans robots, autonomous vehicles, drones, or other technology to transport freight or replace drivers, clerks, or dockworkers.The ABF Freight contractsimilarly prohibits the use of inward-facing cameras, recording devices, biometric sensors, or autonomous vehicles.

Digesting the impact of Yellow's bankruptcy

Last summer, the company that was once the largest unionized LTL carrier entered Chapter 11 bankruptcy, and its freight operations may not have been the most valuable asset to competitors.

Its roughly 170 owned freight terminals—many in high-demand markets—brought in nearly $2 billion for the highest bidders at auction. The federal court overseeing the bankruptcy has approved the auctioneer's plan to sell its trucks and trailers this year.

A. Duie Pyle Chief Operating Officer Frank Granieri said Yellow's collapse boosted its LTL competitors in the second half of last year by removing capacity from the market. His company acquired four Yellow terminals at auction.

"Interestingly, if not for Yellow's collapse, looking at weight per shipment across the industry, you would see that the market was quite weak," Granieri said in an interview. "That reflects the weak economy, especially in areas like manufacturing and real estate."

Adopting electric trucks and other technology

The freight industry is not short of people who are cautious or even skeptical about heavier, more expensive electric trucks and other emerging technologies.

But corporate sustainability policies and regulatory deadlines in places like California requiring a shift to zero-emission vehicles are prompting fleets to increasingly purchase Freightliner eCascadias and other electric trucks in bulk.

Companies such as Estes,Walmart Canada,、Reyes Coca-Cola Bottling,、Penske Truck Leasing, Pitt Ohio, and Ryder System,have all ordered or received zero-emission trucks in recent months.

The ransomware attack on Estes reminded carriers of the technology investments needed to protect their operations. The National Motor Freight Traffic Association, in its2024 Trucking Cybersecurity Trends Report, recommends that the industry address threats by upgrading systems and training employees to recognize phishing.

"While focusing on enterprise systems and the technology that supports them, we cannot overlook threats directly targeting the trucks themselves," the report states.

Pushing for parking spaces and ending broker fraud

OOIDA's Pugh hadhoped that in 2023the federal government would pass legislation allocating hundreds of millions of dollars for truck parking spaces.

But that hope did not materialize. However, OOIDA plans to intensify its push in this critical election year.

"It failed to pass in 2023, one hundred percent due to political infighting," Pugh said. In an election year, what is the appeal? "Not only can legislators take credit, but our president can too... he needs some accomplishments to show."

Increasing truck parking spaces and combating rampant broker fraud—which costs the industryabout $800 million in extra expensesand causes drivers to waste countless hours and miles without pay—are priorities OOIDA will advocate for this year.

"America needs these measures to pass to move forward, to become a stronger, better nation, and to take care of its citizens," Pugh said.