Forecasting plays an important role in almost every industry. It can help companies manage their inventory, budgets, capacity, etc. It is important to maintain efficiency- whether it involves supply chain management, human resources, or capacity. One industry offers an interesting perspective on forecasting is the trucking industry, as they rely on the forecasting of other industries-such as e-commerce, automobile sales, and gas and oil extraction.
Peterbilt Trucks, a company that leads the trucking industry in products and services, predicts that the growing economy will lead to an even bigger demand for trucks in 2018. Citing the growth of e-commerce, Peterbilt believes that sales in the industry’s heaviest weight class will be in the 235,000 to 265,000 vehicles range in the United States and Canada, which would be the third-best year ever for trucks in the heaviest weight segment. “With the economy strong, the drivers of truck freight- personal consumption, factory output and construction- are good, plus, the inventory cycle is in favor of motor carriers, so I expect freight tonnage to remain robust in the months ahead,” cites Bob Costello, the American Trucking Association’s chief economist.
Many trucking companies have not managed their forecasting strategy correctly to prepare for this increased demand. While most have focused on replacing trucks with more efficient, newer trucks, a shortage of drivers has kept fleets from expanding. This is a perfect example of the importance of managing human resources with forecasted demand. These errors could result in capacity shortages, leading companies to choose trucking companies that have the workforce capacity to meet their demands.
The industry is at a point where trucks have all the loads they can handle. Loads are not moving when the supplier and customer wants them to because there are not enough trucks and truck drivers available to move them. This can lead to spoilage, loss of customers, and market share, an example of supply chain failure. In addition, outside factors such as the enforcement of an electronic logging device mandate, could take more trucks off the road.
As the economy continues to grow and the demand for trucks and truck drivers becomes higher, it will be interesting to watch and see how the industry adapts to meet the demands of its customers. Forecasting has indicated a need to alter supply chain inventory, and unless truck companies address this problem they may not be able to maximize their output.