Most practitioners in the trucking industry wish they could go back to 2018 when there were tremendous freight volumes and increased customer demand. In that year, the overall industry revenue was $96 billion, a figure that was unachievable in 2020 due to the Covid-19 pandemic. As a result, the industry suffered a large drop in freight rates that left many companies struggling to cover their operational costs and pay their employees. But there seems to be some hope for freight companies and truck drivers in 2021. Should they look forward to a trucking rebound this year? Stick around to find out.
Trucking Rebound 2021 Outlook
Will There be a Trucking Rebound in 2021?
There are hopes for a trucking rebound in 2021 that could lead to a very profitable 2022. Though freight capacity may remain tight this year as companies cope with the effects of Covid-19, immense possibilities may arise once the pandemic withers. Experts predict that unlike 2020 (which had uncertainty and lows), 2021 will be the year to expect stability and a reset in the market industry.
While it’s not yet certain, customer demand and freight volumes are likely to increase. Other vital things freight companies and drivers should expect from the industry in 2021 include:
- Increased trucking demand with air shipping being inconsistent
- A rise in spot rates
- A surge in transportation costs
- Increased freight volumes
- FedEx and UPS rate increases
- Continued uncertainty between China and the US
- Tremendous growth in e-commerce shipments
What Forecasts Say
FTR Transportation Intelligence predicts that the trucking industry may regain stability by late 2021, allowing truckloads to return to their pre-pandemic state. The forecast also mentioned that freight capacity will still be tight, and there will be a limited driver pool until a large-scale Covid-19 vaccine is available. Data drawn from the spot market suggests that the industry fully recovered. However, this information is not reliable since the spot market makes up a third of the aggregate trucking freight market.
FTR predicts that truckloads will increase by more than 5 percent in 2021 after a 4 percent drop in 2020. Segments such as flatbed will increase by more than 6 percent, just like specialized, refrigerated, and dry van segments. Dump and bulk segments will grow by 5 percent, while the tank segment will increase by 3 percent.
Will Drivers Thrive in the Trucking Freight Industry?
November was the strongest hiring month in 2020 for truck drivers, with the average salary being $53,000. This amount was a 3.5 percent drop when compared to the average pre-pandemic wage in February 2020. Most drivers are skeptical that the salaries will remain as they were in November. Other driver-related constraints include a decrease in the hiring of new CDL drivers brought by state-level testing and training limitations in an era where social distancing is a norm.
The trucking freight industry lost thousands of drivers to sectors such as construction or local delivery and retirements. With few drivers available, freight companies will struggle with shipments. It’s beyond their control since they have to wait until a Covid-19 vaccine is available to everyone, including the truck drivers.
Will the Truckloads Increase?
Goods for transportation continued to increase at the end of 2020, thus putting pressure on freight companies to hire more drivers to move them. FTR notes that the GDO goods transport shot to 85 percent in the third quarter of 2020. The sudden freight increase made up for most losses freight companies incurred in the first and second quarters.
Industrial products weren’t part of the freight moved by trucks in late 2020. The cargo included consumer goods mainly in the e-commerce sector, which exerts a lot of pressure on delivery services. As of November 2020, local deliveries accounted for up to one in three new jobs created in the economy. Furthermore, more than half of the recruits come from freight-based businesses, including the warehousing and trucking sectors.
Consumer spending habits shifted from services such as traveling, cinema, and dining out to goods sub as groceries and personal care items due to the pandemic. Covid-19 forced most people to work from home, limit their outdoor interactions, and order items online instead of visiting brick-and-mortar stores. Furthermore, higher-income people spent most of their cash on goods rather than services.
Though the trucking freight market is still volatile, businesses are better positioned to adjust to the changes in 2021 than in 2020. As Covid-19 vaccine rollouts commence in different parts of the world, companies will hire more drivers and expand their reach to areas that they couldn’t reach due to the pandemic. The industry will likely return to its pre-pandemic state by late 2021.
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