CNBC: Why The Trucking Industry Is So Fragmented And Chaotic

Trucking is an especially fragmented industry, which makes it susceptible to continuous boom and bust cycles. While the pandemic wreaked havoc on several industries, trucking is no exception: the industry as a whole is experiencing a shortage of drivers, high turnover rates, and order delays, among a slew of other problems. With 40% of the global economy dependent on freight and logistics, the industry’s issues resonate across supply chains and through other dependent industries.

Trucking is an $800 billion dollar industry that has proven too tough for one company to dominate.

Low barriers to entry make it easy for aspirants to start companies, and competition is fierce. There are thousands of trucking companies in the United States, and the fragmentation of the market produces huge boom-and-bust cycles. Some companies have tried to consolidate or roll up smaller operations, but the industry is resistant to it.

New technological developments, such as self-driving trucks, could spur consolidation by removing one factor that keeps the industry so competitive: drivers. That will not be easy — companies are still perfecting the technology, and the regulatory landscape would need to be changed to accommodate these vehicles.

Shared courtesy of CNBC/YouTube

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