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Our strategic planning meeting this year was held in
beautiful Monterey, California, which is one of my favorite
places. This meeting is a really important opportunity to
unplug from everyday activities and focus for a couple
of days on the TCA organization, programs, policies, and
value proposition. We had the chance to perform an honest
evaluation of everything that we do. We really wanted to
step back and reflect on how our programs and organization
can provide greater value to members. I am really pleased
with the direction we are headed; now we just have to keep
building momentum. As a side benefit, it also gives a chance
for our officers to bond together and create some important
team dynamics. I really look forward to it every year.
One of the stories in this edition revolves
around the bottom-line costs of operating a
trucking company in today’s economy. In
addition to normal price increases due to
inflation, what factors are driving up the cost
of equipment, maintenance, staffing and other
business expenses? Are the after-effects of the
COVID-19 pandemic still impacting pricing in
the industry?
The truckload industry is currently suffering through one
of the worst markets we have seen in some time. After alltime
highs through the pandemic, it didn’t take long for the
bottom to fall out. While rates dropped farther and faster than
anything we have possibly ever seen, costs within the industry
continued to climb. This has put a lot of carriers at risk.
While I am not an economist, I have learned a few things
about cost over the past three decades. When you talk about
equipment prices for example, there are a couple of buckets
you need to understand, including raw materials, margins,
labor, and regulation. We are starting to see relief on raw materials
after the COVID years and world conflicts took raw material inflation to
extreme highs. That alone should start to bring cost relief, although it
may not show up right away.
Some manufacturers that are still seeing strong demand may keep
those raw material savings to bolster margins; they may only give those
savings up when they see a softening of demand. Manufacturers may
also keep those raw materials savings to offset higher labor costs. Those
higher labor costs are affected by many different factors, including
the supply-and-demand balance within the workforce, cost-of-living
pressures, and pressure on local minimum wages in many states, just
to name a few.
Another wild card in equipment costs is environmental regulation.
Each new regulation puts upward pressure on equipment costs. With
several new standards coming over the next few years, it could be a
bumpy ride.
TCA and many of its members are active participants in
nonprofit initiatives, such as The Wall That Heals and
Wreaths Across America. Please share a little bit about
the association’s involvement with these organizations.
One of the things I really appreciate about the trucking industry is
that we have good people. Many of the owners of companies are selfmade
and down to earth. They also recognize the importance of giving
back. The TCA officers and staff are continually evaluating how we can
effectively give back to the communities we serve. With many of our
drivers and office staff having served in the military, programs such as
the Wall That Heals and Wreaths Across America provide an opportunity
to give back and honor those who served. Even for those who didn’t
Currently, Williams says, he is concerned with the financial health of TCA members. The association provides
valuable resources to help motor carriers survive, even thrive, when the industry faces issues.
serve in the military, there are strong feelings associated with this great
country. We appreciate what we have and want to instill that in future
generations.
In addition to these programs, the TCA Scholarship Fund provides
meaningful education dollars to the up-and-coming generation. We have
been in discussions about potentially expanding the reach of those dollars
to include vocational education needs, including mechanics. There is a
growing need for trained mechanics in our industry, and I think we are in
a position to adapt — and at least participate in solving that need.
In addition to the topics noted in previous questions,
what issues are top of mind for the trucking industry
at this point?
I think the most pressing issue in my mind right now is the financial
health of our members. With the truckload market embroiled in a tough
cycle, this is a time when membership in the TCA should be most
valuable. Carriers have a chance to really examine their companies to
make sure best practices are actually being followed. Our benchmarking
programs and seminars allow carriers to really see where they are doing
well … and where they still need some work.
We continue to push for favorable tax policies at the federal level.
We are cautiously optimistic that we may finally see some relief on the
Federal Excise Tax. This will be important in the short term, giving cost
relief to member companies. It will also provide the ability for companies
to better afford safety technologies and emissions reducing technologies
down the road. Every little bit helps.
Thank you for your time, Mr. Chairman. I look forward
to our next conversation.
TCA SEPTEMBER/OCTOBER 2023 www.Truckload.org | Truckload Authority 27