BALTIMORE, Md. -- Impending operational, economic and regulatory changes are about to turn the trucking industry on in its head, states a new Stifel Nicolaus white paper.

After a mid-decade bump, the last decade fizzled due to a major recession and slumped freight demand, but things are looking better for those quick to adapt for the next 10 years, states the report from the firm's Transportation & Logistics Research Group.

Most notably, the supply chain will shorten due to increased energy and commodity prices, changing labor demographics and wage rates, declines in the value of the U.S. dollar, increased international security regulation and technological innovation.

"The increase of shorter supply chains means there will be an increase in fully integrated, domestic supply chains," the white paper states. "These will not be well served by the current transport infrastructure, which was designed to distribute imported manufactured goods. Shorter haul truckers and carriers of raw materials and components should be able to capitalize on these trends as the new decade unfolds."

Stifel Nicolaus also says that as the middle class expands in Asia and those workers' compensation expectations evolve, it will tip the scales away from U.S. imports toward U.S. exports. Trucking companies involved with shorter domestic hauling, intermodal and exports will be poised to take advantage of the shift. 

The Americans could join Canada by changing into
an export-based transport system over the next decade

Something that will greatly impact the balance between supply and demand will be federal regulation, such as CSA 2010, which, theoretically, will do a better job of weeding out unsafe drivers and trucking companies out of the market. Hours of service, electronic onboard recorders, new rounds of emissions standards, rail re-regulation, and speed governors, are all factors that could continue to drive transportation prices up, according to the report.

"While a reduction in capacity may be the remedy needed to cure the industry's current ills; longer term, one has to wonder if transportation costs won't skyrocket, as the current decade matures and after demand rebounds (reflecting the recovering economy) and capacity shrinks (to reflect the implementation of a myriad of new safety and environmental rules and regulations)."

Stifel Nicolaus says that industry consolidation will not play a large role in the next decade, while diversification of service offerings, particularly into non-asset intensive services, will become a larger trend.

"The idea is that margins are as good or better in these asset-light spaces and investment requirements are significantly less; therefore, returns on invested capital are higher."

Meanwhile, "foot-dragging" on fixing highway congestion "will sap further productivity from the trucking industry (thereby increasing the costs of trucking) and delay the implementation of a plan that could encourage the use of more productive trucking combinations.."

-- with files from Truckinginfo.com