2022 year-in-review and 2023 predictions.

0:00 | Sina Falaki

Welcome to Motive’s 2023 industry forecast webinar. We are excited to have you join us today to discuss the challenges and opportunities that fleets faced in 2022 and a look ahead to what 2023 may bring. Now, we’ll be starting in just a few minutes to allow more registrants to join us. This webinar will be recorded and sent to the email address you registered with by tomorrow. A PDF copy of this presentation deck will also be provided in the email. 

Please note that we will be taking live Q and A questions at the end, but you can submit your questions anytime throughout the presentation. We will also have live polls to engage with you all, so please keep an eye out for those on your screens. We truly appreciate everyone taking time out of their day to learn more with us. We’re always inspired by your needs and feedback, so please feel free and welcome to interact with us today. We’ll begin this in just another minute. 

This year has been a difficult one for fleets, as disruptions in supply chains, natural disasters, and economic challenges have all impacted the industry. But through it all, fleets have turned to technology to become faster, safer, more efficient, and more profitable. As we look ahead at 2023, there are many questions on the horizon. Before we talk about that, I want to introduce myself and our speakers today. 

Next slide, please. My name is Sina. I’m the director of product marketing here at Motive. I’ve been in the construction industry for the last five years now, solving technology and other intersections across not just construction, but over a wide variety of industries. I’m joined here to welcome our speakers as well, Steve and Sean. Steve.

2:15 | Steve Keppler

Thanks, Sina. Steve Kepler here, co-director of Scopelitis Transportation Consulting. Been in trucking and transportation for 30 years. You can tell by my graying hair.

2:27 | Sean Garney

Yeah. And I’m Sean Garney, the other director at Scopelitis Transportation Consulting. Also been in trucking and transportation the whole of my career, as evidenced by my lack of hair altogether. So super excited to be here. Looking forward to the webinar. So thanks, everybody.

2:47 | Sina Falaki

Steve and Sean. So let’s cover the agenda of what we’ll be talking about today. Today’s topic, we’ll be covering four sections. Across these sections, we’ll be talking about trucking, food and beverage, construction, and oil and gas fleets, technology trends in the industry, predictions for 2023. And we’ll have a Q and A. 

In the first section, we’ll be discussing the key trends that have impacted trucking, food and beverage, construction, and oil and gas in 2022 and how these industries have responded. In the second section, we will delve into technology trends that have emerged in the industry, including the increasing demand for automation and artificial intelligence, the potential for autonomous vehicles, and the impact of the Canadian ELD mandate. 

The third section, our panel of experts will be making their predictions for what 2023 has in store for fleets. We will discuss topics such as the potential for speed limiters, the future of independent contractors, and the impact of the Bipartisan Infrastructure Law on the industry. Finally, we will open up the floor for a Q and A session. This is your opportunity to ask our panel any questions you may have about the trends, technology, and predictions we have discussed. We encourage you to take part in this interactive portion of the webinar. 

Thank you again for joining us today. We hope you find this webinar informative and insightful as we navigate the challenges and opportunities of the coming year. Now, before I bring in Sean, I want to launch a poll. In this poll, we’ll cover, what is your number one business challenge headed into 2023? Give another five seconds. Okay. No doubt it’s labor shortage, and productivity and communication issues. Two things we will significantly cover today. So I’m excited about that. I’d like to welcome Sean to talk a little bit more about our trends coming in 2023. Thank you.

5:11 | Sean Garney

Awesome. Thanks, Sina. Appreciate that. Looking forward to this webinar. We’re going to look back at 2022 and hopefully look forward to 2023 a little bit. But before I do that, I’m going to interrupt the entire flow again with just one more poll question. Brie, you could launch that poll for us. Remember, to answer the poll, you have to use your control pane. It’s on the right side. 

For me, the question is, what technology challenges are you facing in your industry or rather industry segment, right? Are you frustrated with the lack of innovation? Is it that you have technology that’s disconnected from one another … so various technology stacks that aren’t speaking to each other? Are you having trouble getting visibility into your field operations? Are you having trouble with projects getting installed out? 

We’ll give it just ten more seconds here and we’ll have Brie launch this or confirm this poll. I have it on this far-off screen way over here. So I’m going to duck down as soon as this is closed to figure out who won today’s lottery. It looks like 33% thought that it was the disconnected technology that was the biggest concern, as well as project stalling. 

And that’s really something that Steve and I have witnessed for a long time over the last few years, is just frustration that technology is not sort of integrated into one another as well as it can be. Lots of good folks working on that, so appreciate the interaction. There’s going to be one more poll question for you all a little bit later, but until then, I’m going to dive right into the trucking industries, and we have trucking, and then we have just different fleet segments of trucking. 

Sina is going to talk about that a little bit later, but I think it’s fair to say without a doubt that 2022 was not the easiest year for trucking, right? Like, for instance, in the spring of 2022, the spot market and the diesel prices let a bunch of people use scary words to describe what they thought was going to happen in the 2022 trucking and transportation economies. Words like bloodbath and the great purge, particularly for smaller operators, right? 

And a big cause of that, we’ll remember, was that consumer spending began shifting away from those physical goods. We were in our sort of COVID pandemic mindset where we were staying at home, we were purchasing physical goods. But now, finally, we still had a little bit of that money from the stimulus left and we were able to go outside again. And so we wanted to spend money on different things, shifting our spending to travel and entertainment, and of course, that impacts trucking for sure. 

Another big cause of some of those scary predictions in 2022 were diesel prices, which in the first week of 2022 were $3.61 a gallon. We ended the year up 26% at $4.54. But of course, that was down from the mid-year high of almost $6 a gallon. $5.81.And these particular challenges, the spot market, the softening of the spot market, and the increase in diesel didn’t impact all companies equally. 

The smaller companies had a bigger challenge dealing with these problems than the larger companies and that’s because they’re, of course, more subject to the fickle spot market, particularly owner-operators and extremely small carriers. They have to use the spot market a lot more for backhauls and even head hauls and they don’t have the buying and leveraging power or they don’t have the buying power to leverage contract fuel prices. 

Right, so they’re often having to pay pump prices for fuel and that makes it very difficult to run a profitable business, right? FTR estimated that trucking conditions hit an 18-month low in October, which was spurred by these increases in diesel and this sinking or softening of the spot market. You know what though? Predictions of the freight recession that we were reading about in 2022 didn’t really materialize. 

Of course, it wasn’t a great year for us. We had a peak and then a sort of slow for you all, I think this way a slow downward trend as far as profitability went, but it wasn’t as bad as it could have been. And certainly, predictions for next year are not great. They’re relatively flat. But for those of us that were able to survive 2022, I think there is some reason for optimism, or at least maybe not as much pessimism as we had for 2022. There’s a lot of things impacting that too. 

Of course, we learned a lot of lessons from the pandemic when it comes to the supply chain, and the sourcing of our products is certainly changing, right? We’re seeing a lot more reshoring and nearshoring and we’re seeing a lot of those small carriers that left the larger ones create their own motor carrier, got their own authority in 2021. There was a record number of those, something like 120,000 new authorities granted. 

We’re starting to see those folks come back into the fold of the larger carriers working as lease or leasing themselves to larger motor carriers, which is a result of that softening spot market. So I think we’ll see more of that coming in 2023 of course as well. Other trends that we wanted to talk to you a little bit about were the government trends and here we have the vitriolic Congress, and I think you can use this term to describe Congress up most of the time. 

Certainly, 2022 was no exception. It was a midterm election year, which meant that there was certainly a lot of arguing about who had the successes and the failures, and of course, campaigns were going on and nasty things were being said. We had a lot of investigations happening in Congress and folks generally weren’t getting along, not like they’ve been getting along for a long time anyway. 

But it is worth mentioning, despite the vitriol in Congress and despite the fact that they were distracted by their investigations and their infighting, they did accomplish a few marquee pieces of legislation which Steve is going to talk about a little bit later. So we did have probably three or maybe four big bipartisan wins that directly impacted trucking. I think the pandemic brought to light the importance of transportation and trucking in the economy and Congress responded. So that was actually really good news. 

Other trends that we saw in the government were obviously reducing service levels, not keeping pace. Right? So the Great Recession certainly impacted the public sector and the private sector. DMV couldn’t process CDL applications quickly enough. Staffing levels were unable to keep up with CDL testing requirements which ultimately more lessons are being learned from this pandemic every day and this may ultimately lead to some additional flexibility which we’ll talk about a little bit later in the driver’s ability to attain a CDL. 

There’s certainly been a big focus on the environment and alternative energy. Lots of stuff in the Bipartisan Infrastructure Law which focused on that. The EPA has been very busy in 2022 as well. 2022 saw the beginning of the implementation of the Bipartisan Infrastructure Law which was passed in late 2021. So lots of money coming out of that law going to states for enforcement programs and roads and bridges, safety initiatives working to get those done. 

There’s a whole bunch of studies that are coming out of that that we’re going to talk about in a little bit. So fairly busy from a government standpoint from there. But now, of course, we have a new changing of the guard. The GOP has won only the slimmest majority in the House of Representatives, which is going to make governing and legislating even more difficult, not to mention the current sort of state of infighting that they had, where they squeaked out this narrow majority in the House, but took a historically long time to elect a speaker to lead the House of Representatives. 

So those factions in the House, I think, are certainly going to impact things moving into 2023. Two quick other sorts of trends that we wanted to talk about by and large here in the trucking workforce and productivity was, I think, a problem for everybody. We saw in the first poll that it continues to be a problem from a trucking perspective. We have the driver shortage, which has been looming for years and years, and when you combine that with the great resignation, it started to get carriers started to very fiercely compete for more drivers, right? 

And that brought their mind and their attention to the next generation, right? We know our drivers are getting older. We know they’re starting to retire, and lots of carriers started to look for ways to find and encourage the next generation to join the trucking industry, right? And I think that’s a good news story. 

We need to look at our industry and how we make it as attractive as other industries to attract the important people that we need to help us run our companies. Companies are thinking about adapting their operations to accommodate sort of the work-life balance that the next generation is wanting or demanding. We’re learning that it might not always be all about money. It could be about that work-life balance, about that sense of mission. 

So we’re learning a lot more about the industry and about the people we’re going to hire in the future. Another trend in the industry that you cannot ignore from last year was all the action happening on the independent contractor front. The model came under considerable fire in 2022. A number of things happened, including the Supreme Court turning down the opportunity to rule on California’s AB5 law, which makes it extremely challenging to utilize an independent contractor model in California. 

The Biden administration too, who many say is probably one of the most worker-friendly or union-friendly presidents certainly in recent history, has been working on this model as well, rescinded the Trump era definition of an independent contractor. In favor of a more challenging definition, the Bipartisan Infrastructure Law has set up the Truck Leasing Task Force, which is going to look at truck leasing arrangements, their impact on safety and profitability of independent contractors and owner-operators. So more focus there. 

We couldn’t talk about workforce and productivity without talking about entry-level driver training, which was a long time coming, was implemented in February of 2022, placing new training requirements on those wanting to earn a CDL for the first time — or to upgrade their CDL. Certainly mixed success here. We didn’t seem to see a reduction in the number of people going through training. Still plenty of people going through training, but the success at which they were being trained to properly operate a commercial motor vehicle was certainly called into question. 

And FMCSA has been looking to trend up their enforcement on entry-level driver-training schools in 2023. So I think we’ll continue to see that certainly, part of productivity is the ability to manage and to purchase new trucks and parts. We saw a shortage, which sort of came to a peak in 2022, is slowly beginning to improve. But if you’re looking to grow as a trucking company, and you can’t find the drivers and you can’t find the trucks and the parts, probably the best way to grow is through mergers and acquisitions. 

And so we saw the merger and acquisition scene sort of grow in 2022 as a quick way to sort of add power units to your fleet, right? And then finally, I talked about this in the last slide a little bit. 2021 saw historic spot market prices and that brought lots of drivers into the industry, lots of drivers and independent contractors to create their own operating authority and to begin chasing high spot market rates. But unfortunately, we know there was an equipment shortage. 

And so a lot of them, maybe, got their equipment at an inflated price and then entered the industry, saw diesel prices shoot up through the roof and spot market rates dropdown. And quickly they became less profitable than maybe they thought they were. I think in 2023, 2022, we saw this trend. I think it’ll continue in 2023, where a lot of those very small motor carriers begin to lease on with larger motor carriers, or maybe park the truck against the fence for a little while. 

So I think we’ll see that moving forward. And then finally safety. We have to talk about safety. It’s certainly a passion of mine. And Steve and I know of Motive’s as well. Things have been moving in the wrong direction for some time now, especially in relation to fatalities. I’d say the entire picture isn’t bad. There are ways to look at the data to show that maybe the total number of crashes are at least staying steady, but certainly, fatalities are rising, and that’s a challenge. 

Lots of folks have pointed to a whole bunch of factors as causes for why crashes have increased … different rules that FMCSA may have implemented. I would caution anybody away from pointing to any one factor when thinking about why crashes are trending in one direction or not because they’re very complicated, complicated events that need sort of a thorough investigation. 

Running along the lines of safety is certainly nuclear verdicts and litigation … seeing a continued increase in this happening. The reptile theory is a very popular theory right now with plaintiffs’ attorneys where they sort of imply that the circumstances of this particular crash matter or not. What matters is systemic failures within the trucking company that creates less safe conditions. We’re going to see more of that, I think, in the future. 

But I do believe the industry is getting better at this. We’re making it harder for plaintiff’s attorneys to win, and we got to continue to educate the industry if we hope to win in the future. And then finally, I’ll just mention, a heightened focus on data and metrics. Steve and I, as consultants, get a lot of questions on how to manage big trolls of data, what questions to ask the data, whether or not I need to look at all of the data. 

There’s lots of things we could say on this front, and I think we’ll get to some of that later in the webinar. But we can stop short to say there’s lots of people doing a lot of very creative, innovative things with your data. So lean on the most knowledgeable, and I think you’ll succeed. With that, I am going to shut up for a second. I’m going to send it over to Sina and he can talk to us a little bit about construction.

20:54 | Sina Falaki

Thanks, Sean. So, absolutely about what Sean has discussed around a lot of supply chain constraints right, and disconnecting the integrations and data and so forth. Growth in construction is interesting because it’s continued despite facing a number of the challenges, including the supply chain issues and the need to adopt really new technologies in order to optimize operations. 

It was just a few days ago that I saw that construction businesses added 28,000 jobs in December, which is above its average of 19,000 jobs added per month last year. Despite those higher mortgage interest rates, higher in the sector has really defied a lot of economic expectations as contractors continue to work. I think one reason for this growth is the increased demand for new construction and infrastructure projects, both in the residential and commercial sectors. 

This demand is driven in part by population growth, urbanization, and the need to repair and upgrade aging infrastructure, especially with the new infrastructure buildouts passed. Another factor contributing to that growth of the industry as a whole is the increasing adoption of technology that can help optimize operations and increase efficiency. 

What we’re seeing today with some of our talk with our customers are that technologies that they’re using include a lot of project management software, fleet management software, 3D printing, virtual and augmented reality, and drones, which a lot of ways can be used for tasks such as surveying, inspection, and progress tracking. There’s also been a trend towards the use of more advanced and specialized equipment such as GPS-guided bulldozers and excavators, and also focus on the use of prefabricated materials to speed up construction time and reduce costs. 

Now, however, I will say the construction industry has also had to deal with a number of supply chain issues, such as shortages of material and labor, which can impact project timelines and budgets. To address these issues, companies in so many ways are turning to new sourcing strategies such as local sourcing and just-in-time delivery, and are also investing in training development programs to help increase the pool of skilled labor, which we’ll also talk a little bit about today of how companies are doing that. 

Now, I can tell you that companies have been increasingly adopting these technology solutions to improve their fleet management asset tracking above. In recent years, especially last year, we saw a massive increase in asset tracking and fleet management solutions. Some of the trends in this area that I’ve observed include the use of GPS tracking systems, telematics, the software platforms to manage and optimize the utilization of construction equipment, vehicles, and tools. 

These solutions have helped our customers as well as in the past, to improve safety, reduce maintenance and repair costs, increase efficiency as a whole, including the use of drones and other remote kinds of sensing technologies for inspection. And monitoring, as well as the use of augmented virtual reality for training and maintenance that we spoke a little bit about earlier, which is helping a lot with retention. A lot. 

This can help to improve safety on construction sites by providing that real-time visibility into the location and status of equipment and vehicles, as well as alerts for potential hazards. This can help to reduce the risk of accidents and injuries, which can not only improve the well-being of workers but also reduce costs and disruptions to the project. What we’re now seeing is that a lot of these construction companies have these programs in place and are having bits of technology in place to help significantly by helping with wellness, they’re also helping with the retention. 

Second, the use of technology can also help to optimize the utilization of equipment and assets. Now, we know there’s a backlog of projects that are happening today, but in order to speed up efficiency onto the projects themselves, which can lead to cost savings. For example, GPS tracking systems help optimize routes and schedules for vehicles, reducing fuel consumption and wear and tear on equipment. 

Telematics is also providing valuable data on the performance and maintenance needs of equipment, helping to identify problems before they become serious and costly to fix, especially when you’re on schedule and something completely deters you. 

And third, what we’re seeing is technology can help to improve the efficiency of the construction projects by providing that real-time visibility into the status of assets and progress of work. This can help a lot of project managers and fleet managers to make more informed decisions about resource allocation and identify bottlenecks or delays in the supply chain. 

And finally, what we’re seeing in construction is technology to help improve the overall management of construction projects, providing a central platform for tracking and managing assets, personnel, and project data. What we’re seeing is people basically … installing platforms inside their entire system, allowing them to connect and integrate with all the different back-office systems to help improve collaboration and communication among different teams and stakeholders, leading to more efficient and successful projects. 

Those are some of the things that we saw in construction. Now, as we move into oil and gas, there’s been quite an interesting shift toward the use of more advanced drilling and exploration techniques such as hydraulic fracturing, or fracking as they call it, in horizontal drilling. There’s also been an increased focus across the board on renewable energy sources such as wind and solar as a way to reduce reliance on fossil fuels. 

So here are actually a few specific ways, as you can see, kind of listed in this slide, in which technology for fleet management, asset tracking are really helping oil and gas companies. What we’re seeing is that the entire shift of GPS tracking systems and telematics can be used to monitor the location and status of equipment such as drilling rigs, pipelines, and tanker trucks. 

This can help to improve the utilization of assets and reduce those maintenance costs dramatically. As well as providing valuable data on the performance of equipment, we’re also seeing improved safety, right? The use of GPS tracking, dash cams, telematics, and other technologies can really help to improve safety in oil and gas sites by providing real-time visibility into location and status of equipment and vehicles, as well as alerts for potential hazards. 

We’re also seeing a monitoring of personnel technology that’s used to track the location, status of personnel, as well as demand schedules and assignments across the board, but is helping to improve safety on oil and gas sites as well as increasing efficiency and reducing the risk of errors or misunderstandings. 

And finally, I want to talk a little bit about the management of projects. So a lot of software platforms, the platforms that we’re seeing today in other technologies that can provide a central platform for tracking and managing projects, including budgets, resources and that collaboration and communication piece such as suppliers, such as your supplier to customers and to contractors, which is leading to more efficient and successful operations for oil and gas companies. 

Now, we talked a little bit about oil and gas. I want us to now head into food and beverage. We’ll talk a little bit about how food and beverage has really helped signify across the board in 2022 and what customers are doing in 2023. Right now what we’re seeing is a trend toward the use of more automated production and packaging systems to increase efficiency and reduce costs. 

There’s also been a shift into the monitoring of reefer temperatures. So sensors and other technologies across the board can be used to monitor the temperature of refrigerated trucks or reefers during transport. This can help to ensure that the temperature of perishable goods remains within the required range, reducing the risk of spoilage and loss. With that, we talked a little bit about traceability and transparency. 

Consumers right now are increasingly interested in the origin and quality of their food and technology can help, and we’ve seen this with our customers today, can help food and beverage customers dramatically to provide traceability and transparency throughout the supply chain. This includes the use of either blockchain or this include the use of the standard database and other technologies to track the movement of ingredients and finished products, as well as to verify the authenticity and safety of the food. 

We’re also seeing personalization, right? So, technology that can be used to offer personalized products and experiences to customers. For example, companies can use data analytics to analyze customer preferences and behaviors and use this information to tailor products and marketing campaigns. We’re also seeing automation where technology can help to automate various aspects of food and beverage production, such as packaging, labeling, and quality control. 

This can lead to increased efficiency and cost savings for companies, as well as reducing the risk of errors in improving food safety and of course, sustainability technology to help food and beverage companies to reduce their environmental impact and improve sustainability. This includes the use of renewable energy, waste reduction technologies, and systems for water conservation and management, and then of course tracking the cargo and optimization of routes and schedules. 

A lot of technology can be used to track the location and status of the cargo during transport, provide real-time visibility to the supply chain, to the customer. The customer can then give feedback as to what is happening on the road, to speak directly to the company, and this can help identify delays or issues, take corrective action, as well as provide transparency and traceability for customers as a whole. 

And overall, the use of technology for fleet management and asset tracking has helped food and beverage customers dramatically to prove the safety, efficiency and sustainability of their transport operations, particularly in this case for temperature-sensitive products. And with that, I’ll shoot it over to Steve to talk a little bit about our technology trends.

31:36 | Steve Keppler

Thanks, I appreciate that. Fantastic coverage. I think what you’ll see, the listeners and all of you that are listening today, you’ll see some commonality across the different sectors here about how technology can be used to leverage your business and to increase safety and profitability. 

I think we got to start with our last polling question. I believe we have here, what new technologies or innovations are you interested in implementing in your company, jobs, or projects? We’ve got four options here: automated platform to help with productivity, dash cam safety, virtual reality for project visibility, or project management tools for coordination. 

Take a few seconds here to complete that poll. We’ll see how things are shaking out. Another couple of seconds here. All right, why don’t we go ahead and there we go. There’s results. So almost half of you: dash cams. Clearly, that’s a focused area right now. We’ll talk about that a little bit in the next set of slides. Productivity and project management. Virtual reality, I think, is just starting to generate more interest, which is probably why it’s lower there. But clearly, there are some benefits there.

Let’s go ahead and move to the next slide. So Sean talked about some of the issues in trucking and I’m going to cover some of this, and the next couple of slides, I’m going to cover the different tech solutions, and Sina covered on some of these for other sectors, but really mapping back to those issues, right? And so, obviously, there’s a lot of challenge. 

And with one of the things we saw with COVID and the supply chain is a lot of companies really investing in … looking across their enterprise. What do I need to do here? With remote workforce that’s increasing by the day, what do I need to do to help enhance that? And technology really has been something been looked at as a difference-maker for a lot of those companies to operate not just throughout COVID but going forward. 

So to address gas and diesel prices, there are several things that fleets are looking at. Everything from more monitoring tools for fuel efficiency and fuel card systems, gamification with different types of strategies to enable your employees to create competitive environments to help with fuel efficiency and really get those competitive juices flowing. 

Detention time monitoring. This is something that’s a growing concern has been an issue in the trucking industry for a long period of time. But more of these advanced technologies have the ability to monitor this and you can use that to integrate with billing processes and systems to charge for detention time for those fleets that have the ability to do so. 

As Sean talked about, clearly there’s been challenges with equipment over the last year, particularly and price increases. It’s really driven a lot of people to look at, okay, how do I extend the life of my existing equipment and how do I use things like maintenance monitoring solutions and benchmarking? How do I integrate that with my parts and ordering systems with my vendors? Are my vendors capable of doing that? 

How do I look at integrating that with my back office systems and looking at advanced diagnostic tools on my equipment to make sure I’m optimizing its use and can extend the life cycle on some of the equipment? 

Looking at … obviously a truck in the asset industries, we’re talking about very capital intensive. So folks are looking at technology solutions, looking at different business models, offering subscription-based products to help spread out that initial capital investment. So looking at ways from the finance side of things to look at tech solutions that can help allay those initial upfront costs. And we’re starting to see more and more with the advent of all this technology. A lot of it here to date has been invested in the truck. 

But what we’ve realized is that, well, we’ve got trailers that need to move the freight and so a lot of those trailers are dumb trailers. So there’s a lot of folks looking at how we make the trailers smarter because that’s moving the freight, and how do we optimize that engagement and provide that data and that visibility back to the fleet, not just on where it is, but what other conditions on that trailer do I need to know about with respect to profitability? 

As Sean talked about, it’s starting to flatten out some to a large degree. Route optimization software, enhanced dispatching systems, integrating with the LDs, looking at that across the platform, hours of service availability for drivers, a lot more interaction and engagement because of the deployment of ELDs and a lot of these databased solutions allows really enhancement of data analytics and dashboards. 

So not just across the enterprise, regardless of where you sit within the company, you can create dashboards to allow yourself in your area of responsibility, but also across the enterprise to look at more analytical tools to enable more business intelligence and database solutions. And then it also obviously adds to enhancing KPIs and also intelligence that can act on the business that really … you have to wait to the end of the month, you can look at it in real time. 

And the e-commerce growth is really … Sina talked about this a little bit. I think one of the responses from the survey people are looking at, you’ve got these siloed type systems, and what I think e-commerce is helping drive more companies to look at, well, how to integrate that across my enterprise? How do I integrate this data and these solutions to help fuel the ability to meet that … last mile? But also all of those handoffs in between and also looking at how increased asset visibility and also optimization. 

So continuing on workforce, again, I think consistent with the polling response, it’s a big issue for a lot of folks. So obviously there’s been a lot of investment in this area in ways that we can enhance the workforce. Everything. Talked about assets, talked about the physical tools that people are using, but also on the people themselves with regards to driver hire, employee hiring and retention, enhanced applicant tracking systems, more effective interaction, speed to hire is a big deal right now, and trying to get folks in those seats. 

And because of all those investments in those different technology solutions, different ways to create incentive programs and bonus programs. Looking at scorecards, I talked about gamification A. Little bit looking at different pay models to enhance driver performance. And really, those drivers not just pay for miles driven, but are they also getting good fuel mileage? What’s been the performance history on the equipment and maintenance? 

So looking at different tech tools for those types of purposes to create different types of incentive models beyond just delivering the freight on time, improved health and wellness programs, it’s a big retention issue for a lot of fleets and a lot of employees in our sector are not getting any younger. So looking at different ways of different solutions to improve health and wellness. 

Things like apps for measuring sleep and your sleep apnea. So there’s all kinds of different things tracking your health, tracking what you eat, and also a lot of companies looking at ways to incentivize that with their health programs. Again, to empower the employees, give them more control over their well-being, and also make more productive employees. 

All along the way, I talked about siloed solutions. So a lot of companies are now looking at how we do these integrations across our platform, what’s our core focus, what’s our core business, what do we do well and where do we look for partner opportunities? Again, focusing on the employees, how do I make that workforce more productive and how do I integrate data across my enterprise to enable that to be more efficient overall?

Digitization. Historically, our industry has been very paper focused, still is in some respects. But there’s been a big shift, again with this shift in remote working in the office staff. Drivers have always been remote, but certainly from the office staff. How do we meet them, where they are, and how do we create digital solutions? 

Several states on the government side … several states have implemented digital licenses, for example, and other credentialing products, making those digital. Sean also talked about the threat to the independent contractor model that’s going to continue to evolve over time. And again, looking at ways to enhance route optimization software and dispatching to help service those ICs, to make them as profitable as they can. Offer them those opportunities where they make sense to make business, and to be successful, and contribute to your business. 

Next slide. So Sean also talked about supply chain. Sina talked about asset optimization and utilization. Clearly, that’s been a big challenge over the last year. And a lot of companies looked at we’ve got. 

Equipment dislocation. How do I know where everything is? How do I match it up with what the freight demands are? There’s a big emphasis there to move toward more tracking and more utilization, more optimization. A big emphasis in AI and machine learning not just within trucking itself, but all those elements within the supply chain, whether it’s on warehousing operations, terminal operations, looking at ports and appointment systems, even with enhanced digital platforms.

Again, integrating those, has kind of been in the past disparate systems. And how do we enhance those? And how do we build AI and learning into this to help enhance the employees, focus the employees, and where they can make the most impact? And where can technology help support them being more efficient and more productive? 

Part sourcing and availability because there’s been challenges with equipment, finding parts, availability of parts. So a lot of fleets are looking toward predictive analytics and using technology to monitor their maintenance more effectively, integrating that with their suppliers, with parts, knowing that, trying to plan ahead as best they can to understand: what’s the wear of these parts? 

And how do I understand it better, and how do I better integrate across my platforms with my suppliers to order parts when I need them and to make sure that I’m being able to deliver the freight? Cyber risk is a continuing challenge. Transportation is the number seven most risky from a technology and a cyber perspective so it’s most liable for intrusion. 

So there’s been a lot of focus in this area of people looking at, how do I harden my systems? How do I make sure those I’m doing business with are legit? And so, there’s a lot of area here. This is only going to grow as more and more technology becomes pervasive in our industry on the safety side of crashes and fatalities. 

A lot more investment in understanding where crashes are actually happening and using data, not just my own data, but external sources of data that I can help manage my flow, manage those situations, and route drivers around those hot spots as best I can. Looking at different technology solutions to improve driver situational awareness and performance. 

Autonomous vehicles certainly have got a lot of attention this year in the press. There’s a lot of emphasis there. Advanced driver assistance systems, all of these are providing more assistance to the driver, oversight, to the fleet, assisting with coaching and monitoring for sure. 

Dash cams have been a fantastic example of that and also being more allowing for more predictive and prioritization for actionable intelligence both from assisting the driver as well as a fleet and following on that. Those same cameras, for example, really can help in exoneration, for example, when there is, unfortunately, a crash and it’s being deployed quite a bit in that space, but also as a benefit to drivers and to fleets, to allow them to help their drivers become more productive and more safe. 

Not just when they’re talking to them face to face, but throughout the life cycle that moves. And the insurance industry is really evolving through technology, whether it’s monitoring their different rating structures, different frequency of rating based upon safety and compliance. In-cab telematics is certainly providing more data, and data sharing is going from insured to insurers. And, looking at different models and how we’re monitoring, and risk, and also rewarding those fleets that are being safe and minimizing liability. 

Next slide. So on the government side … to Sean’s point, there’s really no technology that can deal with a vitriolic congress. I think it just requires the voters to keep pressing on and keep holding our elected leaders to account. But government has enhanced a number of their service offerings. Again, they have had challenges, but they’ve had to be forced into a lot of enhancing web-based services and online services. There’s a lot of focus on environment and alternative energy, whether it’s through electric vehicles, the infrastructure, the Bipartisan Infrastructure Law. 

A lot going on there. We’ll talk about that a bit more in a minute. And the changing of the guard technology. In the past, government really hasn’t focused on technology from a kind of a regulatory perspective. In some cases they do, but generally not so much. But all this technology and this data really opens the doors to what their role is going forward. 

Next, government activity and trucking. I think we’re running a little short on time, so try and move quickly through the next couple. So the Bipartisan Infrastructure Law Sean talked about a little bit $1.2 trillion bill passed about a year ago. So a lot of programs that are going through the pipeline now looking at vehicle miles, travel safety data, what self-driving vehicles, what those impacts are from a research perspective. 

Crash causation. Looking at driver pay, that was something that came out … it’s connecting to safety. Apprenticeship. Sean is going to talk about a little bit. There’s a number of task forces and advisory committees. Government loves to do these types of things and research when they don’t know exactly the solution or have a dicey situation, they do research and task forces. 

Looking at side underride diversity in the workforce and trucking, truck leasing arrangements, and how that impacts on driver pay. On the vehicle side, automatic emergency braking is coming, enhancing underwrite protection on trucks, EV charging and fueling infrastructure, and electronic logging devices from a government responsibility perspective, and enforceability how it’s being used for enforcement. 

Next. Couple of other big bills. Sean talked about a couple of pieces of legislation, the Open Shipping Reform Act and the Chips Act. Two things that came out of supply chain challenges and this is really relating on the Ocean Shipping Reform Act challenges with ocean carriers and detention and demurrage and fees being paid by truckers. 

So some significant changes there that hopefully will help the supply chain moving forward. The Chips Act, really, the supply chain showed us we had a shortage of semiconductor production in the U.S. Reliance on other parts of the world, particularly China. So this law really is pushing a lot of money to the U.S. on onshoring building facilities to make the U.S. more competitive. Inflation Reduction Act. Huge bill. $1.7 trillion bill. A lot of things relating to energy and climate in there. Trucking up to $40,000 with tax credit or for electric vehicles and some other things related to the charging infrastructure.

Next.There you go, Sean. I think it’s going to shift back to you and take it from here.

48:53 | Sean Garney

Yeah. Thanks, Steve. Steve mentioned we have about ten minutes left and I think we want to make sure we get to the predictions. So you’ll see some contact information on one of the last slides here. If you have any questions on the sort of government activity stuff on these slides that we’ve passed over too quickly, please feel free to reach out to us. 

But Steve did a good job covering, sort of what happens in the legislative branch. I think equally as important, sometimes more important, is what’s happening in the executive branch. And so that’s what I’m going to talk about very quickly here. We do know that FMCSA is looking at revising some of the ELD rules it has on the books currently. I think this is a good news story, really. 

It’s the way the government is supposed to work. We create rules, we make our best decisions based on the information before us. Then we live under those rules for a little bit and we look at them again and we decide, hey, maybe there’s some things we could upgrade or improve. FMCSA has laid out in their advanced notice of proposed rulemaking that came out in the fall. They laid out five overall … categories of things that they’re looking to revise. 

Those include whether or not to apply the ELD mandate to pre-2000 engines, what to do in the case of a malfunction that may be technically, your ELD may be technically malfunctioning, but it still maintains the ability to accurately monitor and report your hours of service. Should they have a stronger removal process to remove non-compliant ELDs from the list of certified devices? 

Should they include a third-party certification process like we saw in Canada, and then a bunch of tiny, sort of, technical revisions, which I’m not going to go into here. The comments here were due in November 15. The next expected action is a notice of proposed rulemaking that will come out probably November 2023. From there, we’ll have probably a year until final review. So we see what the final changes actually are to the ELD rules. But for anybody out there who’s hoping that the ELD rules go away, I can make a prediction that that’s not going to happen. So we’ll just have to wait on that. 

So a couple of other things in the administrative front that are happening. These are things that are on the official agenda, things we expect to see action on next year. Updates to the Drug and Alcohol clearing rules, Clearinghouse rules, looking specifically at what are the consent requirements, how do we correct errors in the system and how do we facilitate queries and consent? 

March 2023, we should see our notice of proposal rulemaking on that, give us a lot more insight into what the government’s thinking. I talked previously about finding ways to facilitate a more efficient pass-through of the CDL process, right? And we’re expecting some rules to be, some proposed rules to be published on this. It’s actually scheduled for this month. As a general rule, if I’m talking about due dates for the government, I bet they’re over, but it’s currently expected in January 2023.

And that’s about, again, facilitating or making it easier for states to issue CDLs employment application. This was something they thought about. I think it was 2020, 2021. That’s no longer on the agenda. So the employment application requirements as we know them today are expected to stay for a long time. 

We know FMCSA is looking at CSA, they’ve been doing that a long time, considering whether or not to use that item response theory that was recommended by the National Academies of Science related to that. How do they use that data to make safety fitness determinations on motor carriers? Expecting to see something on that this month as well. We’ve been waiting on that for a long time. 

Speed limiter talked about that in the opener and we are expecting supplemental notice of proposed rulemaking on speed limiters June of this year. This will give us a better sense for the speed that FMCSA is considering exactly what that rule is going to look like. There’s some interesting stuff happening on an idea to require that all commercial motor vehicles be equipped with an electronic identification that will make it easier for law enforcement to identify specific motor carriers on the roadside. 

We saw proposal or advanced proposal rulemaking in the fall, came out to wide controversy, so we’ll have to see what they do on that in the future. But, next move for that is a notice of proposal rulemaking to come out sometime next year. Moving forward, other agendas are doing a bunch of things that are impacting trucking in the various segments of trucking. 

One is hair and oral fluid testing. We know that the Trucking Alliance has been working very hard and the American Trucking Associations to allow motor carriers to use hair testing as an alternative testing specimen. The Trucking Alliance was turned down on a petition where they asked FMCSA if they would be allowed to upload positive hair test results into the Drug and Alcohol Clearinghouse. 

They were turned down on that pending this rulemaking that’s supposed to come out of the Department of Health and Human Services. That’s one of the slower agencies that we dealt with here in trucking. Hopefully, we’ll hear something new on this year. But the proposal, as it looks today, is not really a win for the industry, so we’ll have to wait and see on that. 

Looking at creating the Department of Transportation Office of Drug and Alcohol Testing Compliance, ODAPC is looking at ways to improve the appeals process for drivers who are cited for a refusal by their employer. Often they have no recourse if they did not believe it was a refusal, but the motor carrier said it was a refusal, uploaded it to the Clearinghouse, the employee has little recourse and so there’s a pending rulemaking looking at ways to improve that scenario. 

Also a bunch of interesting things happening on hazmat, which I won’t bore you with, but some folks are actually looking at electronic shipping documents for hazmat, so we’re hopeful on that. There’s a bunch of stuff that’s not on the official agenda that Steve alluded to. The intersection of driver pay and safety have been big priorities for the administration. We’re going to continue to see that happen with a whole bunch of studies coming out of the Bipartisan Infrastructure Law and administrative priorities. 

We’re seeing enforcement evolving. We’re talking about technology. And enforcement is really adopting new technologies to attempt to do things like wireless roadside inspections or remote auditing, and that sort of thing. So the government, too, is adopting that technology to help improve things. And there’s a bunch of research, too. And again, I want to get to the prediction, so I won’t bore you on all this, but as Steve mentioned, when the government is not exactly sure how to act or they can’t quite make a decision, they often ask people to study the issue for them. 

So there’s a lot of great and important research happening this year and next, which I think will inform the next generation of programs. So with that moving right along, here’s our predictions. We’ve got three minutes left, gentlemen. Let’s see how fast we can get through these. I’ll cover the first one and pass it over to Steve. 

The first prediction for 2023, I think, is quite clear, and I think I’ve already mentioned it. A divided Congress will limit the passing of any major bills impact on transportation. The good news is we’ve passed an appropriations bill, so we’re funded and we passed our five-year transportation reauthorization in 2021. So we’re not likely to see any sort of big transportation bills, but we’re covered for the time being. So I think that’s good news for all of us. Steve, want to handle the next one?

57:09 | Steve Keppler

Sure. So the uncertainty around independent contractors were challenged, both smaller and larger fleets. Since Sean mentioned the Supreme Court decision, they punted, essentially decided not to make a decision on the case, and essentially left it to the states. Certainly, we know where California stands. 

Sean talked about that a little bit. But there’s other states that are flexing their muscles in this space, New Jersey being one and others. It’s going to continue to be a challenge with a lot of fleets, no matter their size, how they manage their capacity. So that’s certainly something that we’re hoping to get more clarity in 2023, but we don’t think we’re going to have quite a bit, unfortunately.

57:53 | Sean Garney

Yeah, the spring legislative sessions will be illuminating on that next one. Government regulatory activity will increase. I mentioned this already as well. The primary instigator of this is, of course, that we have a presidential election coming. And so President Biden has priorities that he’s going to want to get over the finish line, sort of legacy priorities that he’s going to push through quite a bit here. He can’t control Congress as much as he can control the administration, so expect more regulatory activity.

58:30 | Steve Keppler

And to add to that, because we’ve got a divided Congress and because the Bipartisan Infrastructure Law, there’s things have been hanging on and so the executive side of the House is certainly going to increase and that’s going to lead to industry concern of government overreach gaining momentum. 

We saw in the speed limiter rule proposal that Sean talked about over 15,000 commenters, the unique electronic identifier, a lot of challenges and comments, and a lot of folks not happy with those. So with all the things on the slate, we think the industry is continually going to be watchful of government and continue to raise their voice.

59:12 | Sean Garney

Yeah, Sina had talked about this a little bit before the Canadian ELD mandate started here just last week. The prediction here is that we’ll have sort of a bumpy ride as the provinces and territories figure out exactly how to enforce these rules. We’ve already seen that already. 

It’s actually been a little quiet on that front, but I think that’s mostly because there’s still a lot of lessons being learned out on roadside on how to properly enforce this. There’s a number of certified ELD devices, including Motive’s, which are providing good service. But the enforcement picture, there’s still a lot of training that needs to happen, some technological advances on the enforcement side. So I think we’ll see sort of a protracted slow rollout of the ELD mandate there.

1:00:05 | Steve Keppler

Electric vehicle demand will surge. Some of this, it’s coming at it from both directions, both in the public and the private sector through the Bipartisan Infrastructure Law and several other bills. 

There’s lots of money, lots of grants being pushed out, not just tax credits, both on the vehicle side as well as the infrastructure side. And a lot of OEMs are investing lots of money, particularly the car companies, and they tend to be a leading factor there. And the car companies are making investments and doubling down on electric vehicles. So we see that continuing to surge in 2023.

1:00:44 | Sean Garney

Yeah, AI, baby, for the next one. We’ll continue to see the march of AI, especially as we have these strains on labor in the supply chain. How can we get technology to learn to advance and to make our jobs a little bit easier? So just a continuation of the trend we see today.

1:01:04 | Steve Keppler

Autonomous vehicles and advanced driver assistance systems are going to advance, but at a moderate pace, not because they took on the eight aside, because they’re proven safety benefits, but frankly, because of some of the other external factors that are impacting on them, both the economy being an issue and also litigation and nuclear verdicts. 

People are being careful about what they’re investing in and how they’re going about it because of some of those external factors. So we see that growing, but a little bit at a moderate pace.

1:01:40 | Sean Garney

The younger generation is not lazy. That’s my next one. We hear a lot of talk about whether or not the younger generation is too lazy to succeed in the workforce. But the fact of the matter remains, we need them to succeed and so industry is going to find new ways to meet the needs of the younger generation to help them succeed in the best way possible. So we’re going to look for new ways to encourage them into our workforce rather than going somewhere else.

1:02:19 | Sina Falaki

And just to piggyback off that, Sean. As this new younger generation enters, make sure to continue to partner and invest in training and development. Provide those opportunities for professional development training, help them advance their careers, promote that diversity, inclusion, adopting policies and practices that promote such as equal employment opportunities and really communicate the value of a career in transportation as a whole. 

Right. Highlight the benefits of a career in transportation, such as the potential for an advancement, the opportunity to work with cutting-edge technology, and potential for a positive impact on society. They’re all things to really be able to attract the younger generation as well.

1:02:59 | Steve Keppler

Yeah … that’s a good point. We’ve worked with several research organizations that have studied that exact fact, right? And so technology and data are a big interest to younger generations and that’s something they’re comfortable with. So clearly that’s a benefit there. 

I think the last two are grouped together. Again, depending on who you talk to, there’s going to be economic challenges in 2023 and freight demand. We’re already starting to see a little bit of a slowing of demand. We see it, certainly, that we saw a huge increase last year. We think that’s going to mute a little bit. 

And organizations, I think, from a tech perspective, have done a lot of, we talked about this a little bit earlier, a lot of siloed investments. And so they’re kind of reassessing kind of their organizations and looking at, okay, how do I best look at my technology investments and my people? Do I have people in the right places and ensuring that technology can work to effectively support the business and the people as best they can? I think, Sina, anything else you wanted to add there?

1:04:09 | Sina Falaki

I think that’s it. I think we’ve covered it well. I know we’re running out of time here. Maybe we can answer just a few questions right as they come in and from there maybe take it away. But one answer that one question that I’m seeing is do we see AI and machine learning solutions becoming more commonplace in the future in this sector? Across the board at least, I’ll take it off and have Steve and Sean kind of chime in. 

But we’re seeing a lot of AI and ML being able to be used to optimize routes, predictive maintenance needs, and really improve safety by analyzing data from sensors on trucks. We’re also seeing a lot of predictive analytics to analyze data from a variety of sources, whether it’s weather, traffic, or customer demand, to really predict future shipping needs and optimize routes accordingly as well. As we talked a little bit about this, but supply chain. Management too, how AI and ML could be used to optimize the entire supply chain from production to delivery by analyzing data on demand, capacity and logistics. Steve or Sean, anything to add there to that?

1:05:18 | Sean Garney

Yeah, the one thing I would add is we see AI is a big sexy term. Of course, I think one of the ways like we think about AI in terms of optimizing our productivity or our efficiency, but another way to look at AI, and this is relevant to our conversation about the younger generation is not lazy, is how can we use AI or those types of systems to optimize routes, to eliminate downtime, to make the driving experience more lucrative and safer, more restful. 

How can we use AI to drive the driving experience in a positive way? Everybody thinks about AI and automation as a way to eliminate drivers from trucks. And I don’t think that’s going to happen. What I think is going to happen is we’re going to figure out how to attract more drivers to trucks and how to make that experience better.

1:06:17 | Steve Keppler

I think that’s a good point. I think you look at aviation, for example, we still have pilots flying planes. We had computers in planes forever. And I think if you look at where AI is kind of taking hold, it’s primarily right now kind of on the operations side, but it’s also starting to find its ways in other aspects of the business, whether it’s on the customer side and helping customer service and analytics, customer segmentation. 

I think product features, it’s enhancing product features, predictive service, and interventions. So to Sean’s point, I think it’s optimized. So when your employee and your people have to engage, it’s helping them be more efficient at that engagement and getting quicker to a solution. So it’s really working hand-in-glove with the people.

1:07:05 | Sina Falaki

And Steve, I love that. On our current customer side, what we’re seeing is by helping with coaching, which is a significant factor with labor and retention, right? As we get a little bit more of inexperienced drivers coming in, the drivers are getting coaching reports just to them. Now the fleet managers aren’t seeing this, right? But they’re seeing it and they’re improving in their driving behavior. 

Or the fleet managers are having to now, have basically like footage that kind of comes in from hundreds of different drivers at any significant moment in time and they will detect which drivers are in the corrective action, which ones do not, helping them significantly too on the productivity side, which is really interesting as well. Now, I think we’ll do one last question and then I think we have got, since we’re over now and for others, we’ll make sure to email out the answers to them. 

But the last question is about labor and retention and how can technology really help address that? On my side, I can kind of go off for it for a couple of seconds and then we’ll have the other two talk about that. But what we’re seeing is, like, we talked about safety and training tools, right? So technology is really being used to provide employees with training and safety resources, even online courses and videos, as well as tools to help them stay safe on the job site, and talk a little bit about AI and what that can do for drivers as a whole and as well as personnel protective equipment and safety monitoring systems. Sean, Steve, tell us a little bit more about how technology is helping with that angle as well.

1:08:40 | Steve Keppler

Well, I think it’s a good point, Sina. I think productivity and safety are two key things, right? And so to the extent that you can enhance your employees’ productivity and their safety and technology can do that in many different ways, you’re going to keep an employee. They know you care about them because you’re continually helping them to be better, and you’re also ensuring that they’re safe and you’re giving them data and they can see for themselves. It’s not a secret. Right? 

So pushing that data out and having the employees have it available to all the employees, here’s what we’re tracking, here’s how we’re working, here’s how successful we’re being so that everyone’s buying into the company. It’s no longer the smoke-and-mirrors that’s happening in the corner office. It’s being pushed down to the lowest level employee. And they get buy-in and they’re like, you know what? I’m part of something here, and I’m part of I’m not just a commodity. I’m really helping the company be successful.

1:09:38 | Sean Garney

Yeah, I don’t have much to add there, except for to say ten years ago, when fleets were trying to install various pieces of technology on trucks especially related to, like, driver safety, there was always big pushbacks again about taking control away from me. The driver, like, you need to trust me because I’m the best situated to help. 

And that happened with ELDs and cameras and all kinds of different things. And I think just positioning that as like, hey, we are providing you, the driver, with the tools you need to be successful, to be more comfortable, to be safe and healthy because, like Steve said, we care about you as a driver. So I think we’ll continue to see that in the future as well.

1:10:29 | Sina Falaki

With that said, thank you so much, Sean and Steve, for coming on board and really giving us your expertise across what the industry is facing in 2023. We really appreciate it. For all other questions that we have left to answer, we’ll make sure to email you directly. 

We have your email addresses here and make sure to check out Scopelitis for any sort of services that you need regarding the industry as a whole and Motive for anything that you’re looking for, for fleet transportation across a variety of industries and more that we’ve covered today. Really appreciate your time. Everyone thank you so much and you’ll hear from us soon.

1:11:11 | Sean Garney

Thanks all.

1:11:13 | Steve Keppler

Thank you. Take care.

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