Trends in trucking industry may keep prices higher for foreseeable future

Leaving aside the still-high price of diesel, a backlog in new trucks and a difficulty in finding younger drivers could mean an already-stressed industry will remain that way for months, and possibly even years.

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Tom Murphy, who manages operations at Parker Trucking, at the company's warehouse in Sioux Falls.
Jason Harward / Forum News Service

SIOUX FALLS, S.D. — In the nearly 40 years she’s spent in the trucking industry, Shelley Koch has seen many cycles.

In 1980, one year after her parents founded K&J Trucking, deregulation in the industry drastically lowered the barriers to entry for trucking companies, leading to an explosion in competition. For a smaller company like theirs, interest rates on a truck ran above 20%, which made turning a steady profit nearly impossible.

After her father died suddenly in 1991, Koch, then in her twenties, took over the Sioux Falls-based company. Since then, every five or six years, the industry experiences a downturn: tightening margins, raising prices economy-wide and often predicting a recession.

Talk to anyone in the trucking industry: It’s happening again.

“My youngest son asked me recently how this year compares to the 2008 recession, when things were really bad,” Koch said. “And I told him things weren’t great in 2008, but they actually weren’t as bad as they are today.”


Shelley Koch, who entered the trucking industry in the early 1980s as a helping hand at family-owned K&J Trucking, has grown the company to new heights as president.
Contributed / K&J Trucking

Though the cyclical nature of these swings tells Koch that the business will get better sooner or later, a combination of trends could mean the rebound in trucking — and, by extension, the wider economy — will take months to materialize. On top of widespread elevation in fuel prices, businesses are struggling with backlogs and shortages in materials as well as difficulties finding younger drivers to compensate for an aging workforce.

“Everything in the transportation world is cyclical, so it'll come back,” said Larry DeGroot, president of Sioux Falls-based freight company Western Provisions. “But the thing is, are certain people going to be able to hang on long enough?”

Elevated input costs could last for years

It almost goes without saying that high fuel costs reverberate throughout the transportation industry like nothing else. Despite a modest drop in price over the past month, the average cost of diesel sits at about $5.43 per gallon, a full two dollars more than one year ago. The math of how this cost bleeds into the wider economy is simple.

“Say you get paid $2.20 each mile. You take one dollar off of that for the fuel, you take 80 cents per mile off for your driver,” DeGroot said. “You don't have much left to operate your equipment, make payments, insurance, all that. So it's a real tough go right now.”

While fuel costs are something that can be factored into freight rates and passed onto customers, another pressing concern less easily fixed is the rapidly increasing cost in new trucks, as well as a parallel cost increase and shortage in parts required for maintenance. According to Koch, a refrigerated trailer has shot up in price around 25% over the last year.

“The current supply chain demand is driving a lot of the price increases,” said Greg Budde, an account executive at Cummins, which specializes in diesel engines. “The competition for parts drives the prices of trucks because they end up paying a lot of money to try and get the parts they need to be able to build on time.”

Like most industries, innovation in the trucking industry has meant a more complex vehicle that is more reliant on electronics and more difficult for a driver to repair on their own. According to Adam South, who works in parts at Zomer Truck & Trailer in Sioux Falls, these factors have led some buyers to seek out used trucks.

Say you get paid $2.20 each mile. You take one dollar off of that for the fuel, you take 80 cents per mile off for your driver. You don't have much left to operate your equipment, make payments, insurance, all that. So it's a real tough go right now.”
Larry DeGroot, president of Sioux Falls-based freight company Western Provisions

“I've noticed that people are pulling a lot of older equipment out of the weeds and trying to get them running because the cost of the new stuff is going up so high. The newer models don’t seem to have the same longevity, and they’re breaking down more often,” South said. “Parts for the new stuff are really difficult to find, too. So a lot of people are going back to the older stuff that is easy to work on and has parts that are still available.”


Multiple sources estimate the backlog in new trucks to be nearly two years. Budde said he expects the backlog to begin subsiding as companies are either priced out or begin canceling orders, a planned tightening of emission standards by the EPA by 2027 could lead to another bump in demand for new trucks.

The rule , as part of a strategy to reduce the output of greenhouse gasses, requires a further lowering of allowable output of nitrogen oxides. Meeting that requirement will require updated engines and electronics, meaning some of the problems in longevity, complexity and part shortages already present in newer trucks may become worse.

Diesel exhaust fluid scare may be fixed

Tom Murphy pulled into a truck stop during a recent haul through southern Georgia.

“Not only was the fluid not available at the pump, which it normally is, they also sell it in one gallon jugs in the truck stop,” said Murphy, the operations manager at Parker Trucking in Sioux Falls. “And here you had two pallets that were completely empty. So guys are starting to be concerned about that.”

The fluid he’s referencing is diesel exhaust fluid, known as DEF, a substance that converts the emissions from the diesel engine into nitrogen and oxygen. Ever since 2010, when the Environmental Protection Agency began enforcing more stringent emission standards, DEF has been an indispensable input in the industry.

Lucky for him, Murphy had been carrying extra DEF onboard. Without it, an updated, computerized engine would not allow speeds over 5 miles per hour, rendering the truck useless.

DEF is a mixture of two components: two-thirds water and one-third urea, a chemical compound high in nitrogen, which makes it highly sought after as a fertilizer. The United States is a net importer of urea; between January and April of this year, trade data showed overall imports of the compound down 13% compared to the same period last year, led by a 46% drop in imports from Russia, a major exporter of the substance.

A worker scoops up a handful of urea made at the refinery in Marsa Al Buraygab, in this 2011 file photo. The petroleum product is used to manufacture fertilizers, livestock feed, and diesel exhaust fluid. The United States is a net importer of urea; between January and April 2022, trade data showed overall imports of the compound down 13% compared to the same period last year, led by a 46% drop in imports from Russia, a major exporter of the substance.
Luis Sinco / Los Angeles Times / MCT

Another wrinkle adding to the shortage scare was a planned reduction in rail cars by the Union Pacific Railroad. In April, Shameek Konar, the CEO of Pilot Flying J, a major chain of truck stops that distributes approximately 30% of DEF nationwide, warned that the planned restrictions would “keep Pilot from keeping many markets adequately supplied with DEF, likely causing shortages that will sideline trucks and reduce trucking capacity.”


A statement from Pilot Flying J to Forum News Service on July 20 said the company now has “a strong supply of DEF and, due to productive conversations with Union Pacific, we have been able to continue to utilize their rail services to provide DEF to our customers and guests.”

Though it appears there is still enough DEF to go around, the widely circulating rumors of the material’s shortage reverberated around the trucking industry. It’s another example of a recurring theme among industry insiders: Federal regulations can alter the business almost overnight.

An aging workforce

Though input costs and availability are something that most people in the industry expect to rebound within a few years, there’s one underlying issue that may continue to strain supply chains: the difficulty in replacing older drivers as they enter retirement in greater and greater numbers.

The refrain of the inability to find younger people willing to take on the demanding lifestyle of driving a truck is a familiar one among those who run trucking companies. But the instinct to blame the specter of a lazy upcoming generation may not tell the full story.

A 2019 report by the American Trucking Association estimated the average age of a driver at 46 years old. The same report estimated that, over the next decade, more than half of all new vacancies in the industry would come from retiring drivers, putting more pressure on an industry already experiencing chronic understaffing. One issue in recruitment mentioned by these reports was the poor work-life balance inherent to the industry.

“You get paid well for what you do, but it's hard work. My trucks are usually gone five or six days a week, mainly on long-distance hauls,” said DeGroot, the Western Provisions president. “It's a tough life, you miss out on a lot of birthdays, anniversaries and family time.”

Outside of work-life balance, the difficulty in finding willing insurers for younger, inexperienced drivers as well as new training requirements present added obstacles for those trying to enter the workforce.

Koch says hiring new drivers has always been difficult; the only difference in the industry, she says, is in the sheer numbers of new drivers required to keep up with ever-increasing demand. But K&J Trucking has been quite successful in attracting younger drivers.


“I just totally disagree with the idea that kids don't work anymore,” she said. “I'm sure my parents said that about me, so that's generational.”

The approach she has found to be most successful is meeting drivers halfway, although she acknowledges that not every company has the schedules or makeup to honor certain work-life balance requests. Still, Koch rejects the idea that drivers should have to entirely surrender their personal lives to be efficient and profitable.

“I have a couple of young guys that started with us when they were 24 or 25. They're extremely profitable, extremely successful, but what's important to them is to be home every weekend,” Koch said. “Now, that's not how they started. They started running the gamut, right? But as our freight changed, we had opportunities to have them home at least part of every single weekend, so we did that.”


Jason Harward covers South Dakota news for Forum News Service. Email him at
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