Trucking Industry Sees Economic Boom in Q4 of 2020
The trucking industry is one of the few bright spots in a 2020 U.S. economy that’s been greatly impacted by worldwide shutdowns.
Coronavirus nearly crashed the U.S. economy in 2020. Global shutdowns have crippled many industries and have driven unemployment to historic highs. It’s the biggest economic crisis to face the nation in over a decade, and never has the U.S. faced a public health pandemic of this magnitude.
Since March, many workers and employers have been forced to adjust to the changing, uncertain crisis. Yet the trucking industry, though changed, provides one of the few bright spots in the economy. Because trucking and the shipping of goods serve U.S. consumers every single day, fleets have been in high demand – making experienced drivers a hot commodity.
Coronavirus’s Significant Impact on the Trucking Industry
The COVID-19 outbreak has led many businesses to shut down for months. Stores have had to restrict the number of shoppers they can let in. Many indoor entertainment venues, theatres, and cinemas also closed for much of the year. Encouraged to stay home, more shoppers now opt for deliveries instead of browsing aisles. In March, many products – like toilet paper – saw shortages. Suppliers rushed to restock shelves.
As the holidays approach, the trucking industry’s growth and rates are expected to continue.
Capacity in the industry is as tight as it has been in years with contract and spot rates higher across vans, flatbeds, and refrigerated trucks.
DAT Solutions said van spot load rates in September were up 28.8% from 2019. By the end of October, rates averaged $2.46 per mile, a 9-cent increase since the month’s beginning. Flatbed rates were up 9.9% year-over-year and had jumped a nickel in the first weeks of October. Refrigerated rates were also up 19% year-over-year.
Spillover freight and contract freight have increased as well, as numerous fleets closed during the pandemic, and many drivers left the industry over health and safety concerns. With fewer available drivers on the road, the need for space on trucks, and the cost of that space, went up.
E-Commerce Expected at Record Levels During Holiday Season
This Christmas season, and through the end of 2020, online shopping is expected to hit record levels. Retailers have worked steadily throughout the fall to stock additional inventory in preparation for the holidays.
However, the amount consumers spend may be curbed due to rampant unemployment rates across the country. As of early December, lawmakers on Capitol Hill hadn’t confirmed whether Americans who’ve had a tough year financially will be receiving any more stimulus support.
Federal Reserve Chairman Jerome Powell has urged Congress to approve COVID-19 relief funds. Without a stimulus bill, he warns the pandemic could have “tragic” economic consequences.
Trucking thrives alongside consumer needs for shipped goods, and truckers are essential workers. The demand for employment remains high, though the speed of the nation’s recovery is unknown.
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