According to the American Trucking Associations and carrier U.S. Xpress, there are a number of factors affecting how the trucking industry will pull out of 2020 and the COVID-19 pandemic.
In its Freight Transportation Forecast: 2020 to 2031, a report produced annually by IHS Markit, the ATA shows that while there is a definite shrinkage in the overall industry this year, the long-term trend for both trucking and overall freight shipments is still positive.
“The COVID-19 pandemic has had an unprecedented impact on many parts of the economy and trucking is no exception,” said ATA Chief Economist Bob Costello. “However, despite significant contractions in 2020, the forecast makes it clear that the long-term trend for trucking, as well as for the overall freight economy is positive.”
The Forecast is predicting that total freight volumes this year will likely to decrease by 10.6% to 14.6 billion tons, with truck freight volumes falling 8.8%. This will change in 2021, with volumes are expected to rise almost 5% and increase an average of 3.2% per year through 2026. According to the report, overall freight revenues will rise from $879 billion in 2020 to $1.435 trillion in 2031.
U.S. Xpress highlighted three specific areas affected by the coronavirus: rising driver turnover, diminishing truckload capacity, and overwhelming load volumes. With decreased CDL school enrollment and the recent launch of the Drug and Alcohol Clearinghouse, the industry has seen a significant driver turnover that has yet to be restocked.
With bankruptcies nearly quadrupling for carriers between 2018 to 2019 and insurance premiums rising even more, a number of small carriers will likely have to close their doors before the end of the year. And while new truck orders have recently seen an uptick, they had been on a downtrend since March. The outbreak has also affected volume seasonality, with the market skipping its usual summer hiatus.
“Each of these three themes will greatly influence trucking rates over the next four to six quarters,” said Eric Fuller, president and CEO of U.S. Xpress. “It’s becoming increasingly clear that high tide conditions will persist for a long while, so shippers and carriers will have to plan – and act – accordingly.”