Tesla Company has become a driving force in the electric car market influencing other companies to follow its trend. The company is a household name as far as the electrical transport industry is concerned yet the company has not ventured into the electric truck business. Currently, heavy electric cars are already on the roads of Southern California, and Tesla has recently joined the race. Elon Musk announced that the company would commence the production of the Tesla Semi come 2019.
In the midst of all the positive remarks about the Tesla truck, there are those who are skeptical about the idea. One of those in doubt is Michael Baudendistel who is an analyst at Stifel Financial Corp. he told Truck.com that the presentation of tesla Semi raised more question instead of answering the already existing ones. He agrees that the truck may be presentable, but the questions that economic dynamics surrounding the truck. Relevant information such as the weight of the car was not released. He insisted that information such as the weight is vital because having more weight restrains the truck from hauling more freight. Another person who is a skeptic of the Tesla Semi is the president of ACT research, Kenny Vieth. His major concern is whether the technology will accommodate long-haul routes. He said that the current recharging infrastructure and the cost could not sustain long-distance trucks.
Speaking to Trucks.com, Antii Lindstrom a trucking industry analyst at HIS Markit, expressed his excitement about the “energy” that Musk is bringing to the market. He also added that the leading companies in the truck industry fear the impact that the Tesla Semi will bring to the market. According to Lindstrom, the aerodynamic design gives Tesla Semi gives it a taller and narrower shape to improve its speed, unlike the ordinary diesel trucks. The truck is expected to gain from zero to 60mph in 5 seconds with no trailer, and from zero to 60mph when loaded to its maximum capacity. The car will travel up to 500 miles once charged he added. Although Lindstrom is adamant about the success of Tesla Semi, he is concerned with the conservative nature of the truck industry that is blocking new ideas.
Various companies have already placed orders for the Tesla trucks. Ryan Curell, the retailer’s spokesman at Walmart stores Inc. told Truck.com the retail company had ordered 15 Tesla Semi. He said that Walmart has a history of embracing new technology and the inclusion of the electric trucks to its supply chain across the U.S. and Canada will be a big leap. Another company that has also placed orders is the J.B. Hunt Transport Service Inc. The chief Executive; John Roberts was quick to show his delight on the “sustainable technology” that the Tesla Semi is expected to bring to the market.
However, Fred Andersky, the customer solutions director for Bendix Commercial Vehicle Systems, concluded that, as much as there is divided opinion about what Tesla is bringing to the market, what stands out is that Tesla is creating disruption is the truck industry. Many companies will move with the trend that Tesla is bringing.
Trucking, as an industry, has been a worthwhile career path for many years. It can be a hard arduous job, but drivers can typically make a decent living through hard work. Harbor trucking, which entails moving cargo short distances from ports to closely located warehouses and rail depots, has recently had a light shown on it which revealed unjust treatment of drivers who hold trucking jobs hauling these short-runs.
In the west coast ports of Los Angeles and Long Beach, which accounts for 37% of the cargo containers entering the US, harbor truck drivers have been working in deplorable conditions. An investigation by the USA TODAY Network has revealed a systematic and repetitive system in which drivers operating out of these ports find themselves deep in debt due to unfair labor and lease-to-own contracts. These contracts effectively force the drivers into a situation where they have to work long, tiring hours just to keep their head above water with no opportunity to reduce their debt or prosper as they should be.
To the average American, the predatory labor practices that these trucking companies are imposing on the drivers who haul cargo for them is extremely unfair and without cause. Those who have rallied to the side of the trucking companies have said that the California law on air pollution and the decision of business to ship by way of the east coast has resulted in a loss of business. They suggest that the horrible treatment of their drivers is necessary to increase the bottom line. Regardless of what they say, their actions are both cruel and unjustified as illustrated in how they responded to judgements against them for trucking jobs.
Truck drivers have gone before state labor agencies to try to recoup back wages and have won judgements against the trucking companies. The result of these victories have amounted to little, as the trucking companies have gone above and beyond to avoid paying the drivers that they have wronged. The techniques that they have implemented to avoid paying what they owe could be considered innovative if not for their inherit wrongness. One of their most used maneuvers involves shutting down the company and reopening under a different name. This has been highly frustrating for the drivers, because they have no leverage to force the trucking companies to do the right thing, Of the 37 million dollars that the drivers have been awarded in back pay, they have received only 3 million dollars of it. That’s less than 10 percent of what they are owed.
To save these trucking jobs, some legislative measures have been proposed to address the issue. One measure would put harbor trucking under the umbrella of fair labor laws. This measure would also seek to end the practice of abusive contracts which keep drivers in debt and perpetual servitude. The second measure allow cities to take their own actions to protect workers by removing the federal government from the equations. Though these measures are a step in the right direction, they won’t solve the problem completely. This is because, as they have shown in the past, the trucking companies have demonstrated that they are highly capable of avoiding and evading responsibility for their actions.
With the current recovery of the freight market, trucking companies are now worried about how they can find enough truck drivers. The demand for shipping has experienced a two-year flop while manufacturing is going through a significant expansion. Retailers, on the other hand, are stocking up prior to the holiday season. While all these are happening, fleet companies are faced with the challenge of recruiting drivers who are qualified to address the high demand. Due to the circumstances, some companies have ended up increasing the wages before securing rate increases from freight shippers.
Most of the time, long-haul truck drivers move from one fleet to another in search of better working conditions, higher pay, and other benefits like schedules which allow them to spend more nights at their homes. Additionally, workers in this industry tend to be older than those that comprise the general workforce. This situation has fueled concern about the supply of these drivers as most of them edge closer to retirement while the younger generation joins other fields.
The issue is compounded by a tight employment market since the energy and construction industries rely on the same labor pool. On average, top trucking jobs pay about $55,000 annually, compared to the $80,000 earned by their counterparts who drive for the oil-and-gas industry. This is according to the chief economist of the American Trucking Association, Bob Costello.
An annual survey by the American Transportation Research Institute of 2017 indicates that for the first time since 2006, the shortage of drivers was the top concern in the trucking industry. According to the research group’s report, approximately 40% of respondents named driver supply as one of their top three concerns. The chief executive of Werner Enterprises, Derek Leathers, indicates that the industry has not experienced a market as tight in the last 25 years, and the situation is expected to worsen. The company has increased wages by approximately 15 percent in the past two years, as one of the steps of facilitating recruitment and retention of drivers. Additionally, the company has spruced up its terminals and equipment.
Carriers can benefit from the tightened capacity as it gives them a stronger grip with shippers on price and can also lead to passing up top trucking jobs if they can’t find enough drivers. Fleets experience significant expansion when business is booming. However, this time around, the condition may be off the table. Covenant Transportation Group’s chief financial officer, Richard Cribbs, indicates that there may be no reason to believe that the company may fail to grow its fleets given the small capacity of drivers. Based in Chattanooga, Tennessee, the company’s cost of employment in the third quarter increased by 4.8 percent from the previous year. However, revenue rapidly increased, and profit soared 59 percent to $4.6 million. The company expects an increase in shipping rates by 5 – 9 percent in 2018, yet its truck count will remain constant.
Most of the drivers scoff at the idea of a deficiency by suggesting higher pay as the solution. According to ATA, this shortage results into delays in deliveries with this year’s shortfall yet to peak. Freight companies may be required to hire approximately 898,000 new drivers in the next decade because more drivers are retiring and the company is continually expanding.