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Economic indicators suggest the trucking industry could be poised for growth in 2021, after the coronavirus pandemic caused a topsy-turvy year in 2020 marked by unpredictable demand and continued uncertainty in the driver pool.
“The overall outlook of the trucking industry is trending in an optimistic direction, and it has been for months despite the shortage of drivers,” Avi Geller, president of the transportation management services provider Maven Machines, told Transport Topics. “The increase in driver pay is a sign of sustained profitability, as well as an increase in expected load volume.” Fleets have in recent weeks been announcing increases in pay rates for drivers.
Transport Futures economist Noël Perry said consumer spending has boosted demand for trucking services, which is lifting companies’ confidence. But he warned things could level out soon.
“There is a lot of momentum for goods production coming out of this upturn in the third quarter, and that should continue for a while,” Perry said. “People are really spending money on goods right now. And they spent more on goods than anyone figured, me included. That’s the positive.”
Paul Lewis, vice president of policy and finance at the Eno Center for Transportation, said if the pandemic is kept under control, demand could remain strong and growth could continue.
“If there is a significant drop in economic activity you’ll see a corresponding drop in trucking,” Lewis told TT. “We saw that when we had major dips in May and April; not just in trucking but freight in general. It has since rebounded. Some of it perhaps may still be catching up from some of the lag that we had in those few months.”
Lewis added the prospect of further government action on pandemic relief also could sway a recovery. Congress passed a $2.2 trillion economic stimulus package in March to help alleviate the strain on individuals and businesses, but negotiations have stalled on further aid.
“There are a lot of people who have been spending that stimulus money despite the fact their service job hasn’t come back,” Perry noted. “There is an expectation we’ll have a little drop off once that stimulus money runs out.”
FTR Transportation Intelligence Vice President of Trucking Research Avery Vise said that while the consumer sector appears to have largely recovered, the industrial sector is still catching up. He predicts freight volumes will not return to pre-pandemic levels until sometime in the second quarter.
“The difference, of course, is that capacity is tighter than it was before the pandemic,” Vise said. “That’s why freight volume will not have recovered until we get to Q2. We’ll still have utilization that will be considerably higher than what it was.”
Plus, the industry will need to find drivers. “The supply of drivers will be tight in 2021,” Vise added. “That is almost a given because of all the constraints we have that we have never had before. The real question is the strength of freight demand and right now our forecast is strong.”
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