SAN ANTONIO—At the annual Rush Tech Skills Rodeo, Rusty Rush, CEO and president of Rush Enterprises, lamented how rough 2023 was on trucking, with some of the lowest spot rates and highest interest rates in recent years.
"Spot rates have been down 30 to 40% for a year and a half," Rush said. "Contract rates have been beaten up, interest rates are through the roof, used-truck prices are down. Not one of them is a killer, but all of them combined [are]."
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In a year that saw some of the lowest spot rates and highest interest rates in recent years, Rush was surprised to see the way the trucking industry has held firm.
"It's baffling to me how the market has remained so strong," Rush told a group of journalists during the truck retail company's annual Tech Skills Rodeo. "In my mind, we've been in freight recession for 18 months... I would have thought we would have slowed down sooner and wouldn't have sold as many trucks as we've sold."
Mike McRoberts, Rush Enterprises COO, believes trucking companies have continued purchasing vehicles in this volatile trucking market because of aging fleets due to supply chain woes that prevented companies from acquiring new fleet vehicles since the pandemic. But McRoberts and Rush agree it hasn't been such a productive year for everyone in the industry.
It's that combination that Rush and McRoberts believe has helped weed out the smaller fleets in the industry, and McRoberts said he thinks those smaller fleets will continue falling out throughout 2024. Rush said that's what truckload carriers have been waiting for.
With the trucking industry beginning to rightsize, what should fleet owners and trucking stakeholders look forward to in 2024?
What to expect in trucking in 2024
Unlike 2023, 2024 will not be all doom and gloom, Rush insisted. "I think certain sectors, like the vocational side, remain strong."
However, there will be challenges that the industry should be wary of, according to Rush.
"I do look for a pullback next year. … Some of the OEMs are saying 10%, I'm saying 20%" pullback with truck orders, Rush said. "Then, of course, everyone is going to wake up and realize what's coming in 2027 (with emissions regulations). You're going to get some pull forward in 2025 and 2026."
Overall, "I think the first quarter is going to be good, decent. From there, I think we're waiting to see," Rush explained. But McRoberts would like to see more clarity regarding the age of fleets.
"The problem is one thing I don't have a good feel for is that age of the fleets," McRoberts said. "If you look at the larger fleets that run 18,000 to 20,000 trucks ... they'll still tell you there's still a little bit of age there."
One trend McRoberts anticipates is the growth of mobile technicians—an aspect of business that Rush Enterprises is currently growing. Rush has 600 mobile technician trucks and plans to expand to 1,000 within the next four years. The company has also increased its pool of technicians by about 8% this year, McRoberts said, another trend he anticipates continuing to rise.
"Mobile and the demand for techs will still be high," McRoberts stated.
How trucking data and technology could evolve in 2024
But one of the most significant "evolutions" McRoberts sees in the industry, and one that interests Rush Enterprises as well, is the use of data and technology within the vehicle for predictive maintenance.
"Telematics and prescriptive maintenance is really probably the hot opportunity in the years to come," McRoberts said.
Predictive maintenance helps truck owners avoid "catastrophic failures" by anticipating vehicle needs through data capture and monitoring. This can help businesses plan maintenance to decrease downtime, dwell time, and the cost of repairs by catching a vehicle issue as it's reparable and before it becomes something that must be replaced.
Rush said one of the things the team intends to do is to improve the customer experience for parts ordering and become more "Amazon-like."
"Whether that's by focusing on the piece of the delivery process (or) upgrading our ordering," McRoberts began, Rush strives to "be able to have our customers know when they're going to get that part and know that X percent of the time, you're going to get it the same day."
As for what powertrain trends will be popular in 2024, Rush and McRoberts are a bit more skeptical about the EV transition and its current proposed timeline. They both acknowledged a place for EVs in the industry, but neither believes an electric semi-truck can economically compete with a diesel-powered truck today.
No matter what angle you view it from, whether concerning technology and software or powertrain advancements and innovations, the industry is undergoing rapid changes. McRoberts said there have been more changes in the industry within the last six years than there have been over the previous 40 years, and it will be interesting to see what trends will stick and which ones will phase out as 2024 unfolds.
