E-commerce, the driver shortage and shifts in consumer demands are changing the operating environment for truckstops and travel plazas and shaking up the retail industry. During the kickoff keynote address at NATSO Connect, four executives addressed the latest trends disrupting the industry, ranging from the trucking industry’s length of haul to the number of consumer trips to the store, giving operators insights to help prepare for the future.
Although freight volumes are up, NATSO members reported that they don’t see as many long-haul truck drivers as they did a decade ago, NATSO President and CEO Lisa Mullings said. “The miles per haul have drastically gone down. In 2000, the average length of haul was 800 miles. Today it is only 433 miles,” she said.
What’s more, to improve driver retention, many companies are creating routes that allow drivers to return home each night, which changes what drivers need to buy when on the road.
Mullings said that infrastructure funding remains a challenge as the federal government’s resistance to increasing funding for highways and roads has not changed. The federal fuel tax hasn’t been increased since 1994. “The people in Washington don’t have the political backbone to do what they know is right. You have every group that does business in Washington saying, ‘Please increase our taxes,’ and they’re not doing it,” Mullings said.
The White House said that it will release its infrastructure funding plan Feb. 12. That proposal is expected to shift responsibility for financing infrastructure projects from the federal government to the states and private sector. The President said during the State of the Union address that every federal dollar should be leveraged by partnering with state and local governments and that where appropriate the U.S. should tap private sector investment to permanently fix the infrastructure deficit.
Among its proposal, the Trump Administration’s infrastructure plan is expected to call for liberalizing tolling and commercial rest areas.
"The states are saying, if you’re not going to give me the money, you have to give me the means,” Mullings said. “When we defeated [proposals to lift the ban on commercial rest areas] in 2012, the vote was 86 to 12. I thought we could relax for a little while, but they are back again, and I feel like this year is a bigger threat than that was.”
During the session, Stephanie Kowitz, senior manager shopper insights for The Coca-Cola Co., told attendees that on the retail front, consumer confidence has never been higher. “The unemployment rate is also lower than it has always been. We are having a moderate increase to income,” she said.
However, the number of retail trips consumers are making has declined. “They are down 1 percent and spending per trip is down 1.8 percent,” she said.
The growth in e-commerce is part of what is driving down consumers’ shopping trips. “We have new ways of shopping and new ways of getting from point A to point B. It is challenging to get those trips back in the store,” Kowitz said.
Consumers also have more power than ever before, with increased choices related to where they shop and how it is delivered. “They also have a lot more price transparency than we’ve ever seen before. In any environment we’re in, we can look at the price presented to us and compare it to any other item,” she said.
Consumers are also looking for personalization. “In the past, it was neat to look like everyone else. That isn’t the case anymore, people want to be unique,” Kowitz said.
While low unemployment bodes well for consumer spending, it can create a challenge for businesses looking to hire new employees. Tara Bradshaw and Heather Meade of Ernst and Young told attendees that unemployment is averaging about four percent. “That can be a really hard thing because it starts to put employees in the driver’s seat,” Meade said, adding that the workforce within the truckstop industry has started to change.
Employees focused on retail is expected to grow 6.1 percent and the number focused on fast food is expected to grow to 15.8 percent, Meade explained. “It also represents where the industry is going. It is one of the fastest-growing industries across the board,” she said.
In addition, the labor pool of 16 to 24-year-old workers is shrinking while the older labor pool of those 55 and over is increasing.
"You have to know your audience. You need to know who they are, where they are, how to find them, what is important to them and how to keep them,” Meade said.
Photo: Tara Bradshaw and Heather Meade of Ernst and Young addressed the crowd at NATSO Connect.
Photo credit: Brittany Palmer/NATSO
/// NATSO Connect 2019 will be held February 10 - 13 in Orlando, Florida. Get on the list to learn more about NATSO Connect 2019 here.
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