The COVID-19 Pandemic has certainly delayed plenty of service in the spot freight market. In which case, the trucking industry is certainly dealing with enough haunts from their rickety past. So for there to be a likelihood of “freight recession” is certainly dangerous. Just last year, there was a colossal end to Celadon, the trucking behemoth everyone has been all too familiar with. Plenty of public-trading fleets are seeing stork drop in double digits. The Yellow Corporation themselves have been going down about 50% since March itself. Schneider National themselves has gone down about 20% through the same period.
Freight Recession is more than likely to happen. According to the ATBS Vice President, Mike Hosted, “Generally speaking, when the spot market is good, it only lasts six to nine months, but we’re going on almost two years and counting with very little end in sight.” The February and March spot market shows a ridiculous development. There has been a 2.2% increase in spot load postings show truck posts increasing all the way more. Something
If nothing else is to be said, it’s the very worry that diesel price has been changing that we have to blame. It heads toward an upward tick as it has been doing from April 6th, 2020 to April 4th 2022.
Trucking is Undergoing Quite an ugly Recession.
Used truck prices are skyrocketing, as evidenced by the 130,000 new carriers created since the pandemic. Labor for trucks are in such short supply, we’re training younger applicants to haul down the highway. And let’s not even touch the Drug & Alcohol ClearingHouse.
Sadly, this is all to be expected. Pandemic or no pandemic.
The last two years have presented results unlike any other. That is to say that a typically good trucking economy is always in flux. With a shelf-life of 12-18 months, the trucking economy is always expected to nosedive. Experts in the community agree it has to do with too many trucks bought, though it entices the economy.
Which means that when the industry always over-buys, the price of freight always goes down. Even with 100,000 trucks from homegrown local businesses, freight still plummets in price.
So, here’s what you can do to prepare:
- Brace for impact early by identifying areas in your trucking company that would need a cushion in times of crisis.
- Expand to new views by noting areas where necessary offerings could allow for price increases with clientele.
- Survey in your fleet where you can operate better.
- Make budget cuts a priority and keep your sights on improving your carrier’s financial health.
- Get rid of your debt! You can offload old gear and get safer technology making you more money, more quickly!
- Outsource lavishly. Need we say more?