When times are good, there is a tendency to “let the good times roll.” And in the case of the trucking industry, this advice is usually taken literally.
2018 was a banner year for the trucking industry. Not only were there record-setting levels of demand for drivers, but the pay was highly lucrative as well. Driver pay per tonnage was at a 20-year high and, as is usually the case during the good times, companies decided to go all-in on the industry. At the time, the economy was growing, so shipping companies were buying more trucks and hiring more drivers. There were reports that things may slow down a bit in 2019, but that’s nothing to worry about, right?
Boy, were the experts ever wrong.
The Reality Of Being A Trucker In 2019
2019 has turned out to be an incredibly difficult year for the trucking industry and the drivers who depend on it for a living. Some have even described it as a “bloodbath.” Over the last six months, rosy outlooks have given way to missed earnings targets and unemployment.
Since the beginning of 2019, six trucking companies have gone under, leaving more than 2,500 drives unemployed and looking for work. This was due to rates in the spot marketing being down by 18% year-over-year in June. Morgan Stanley recently cut its estimates of the trucking sector by 4%. Trucking and shipping companies that have existed for 40 years or more have announced that they are closing down. Even worse, this downturn doesn’t appear to be regional, but country-wide.
For those who work at or own small businesses in the trucking industry, this downturn has been devastating. The average trucker’s pay is way down while their expenses remain the same. This has left driver some with an income $20,000 less than in 2018, a massive decrease. These market realities have led to some having to default their trucks and find work in other industries.
What Has Caused The Downturn?
While the trucking industry has historically been cyclical, this latest downturn has been unbelievably hard on drivers at every level. What is most frustrating is that no one seems to know what exactly has caused this switch in outlooks. Some are chalking it up to overcapacity, as there is currently an eight-month backlog of truck orders because of the number that was bought in 2018. Others are saying that it might have been the terrible winter weather at the beginning of the year. The economy also isn’t quite as strong as it was in 2018, with reports of slowing growth and fears of a trade war still in the sights of companies.
The Good News
As a team that hires hundreds of drivers for our clients on a monthly basis, we can tell you that the slow down is not nationwide. Spectra360 is still receiving job orders for drivers of all experience levels and, from our standpoint, things look primed to turn around throughout the rest of 2019 and 2020.
There have been reports of an acceleration in retail spending that could help pull the trucking industry out of its downturn. The industry is also not currently in recession levels, meaning that there is still work to be found, if you know where to look.
At Spectra360, that is precisely what we do. We are a talent management agency that works primarily in the trucking and logistics sectors. Our deep understanding of these industries, along with our close relationships with major companies, puts us in the perfect position to match qualified talent with the employers who are looking for them.
We help people find contract work, temp-to-hire, and direct hire positions. If you’re currently going through a tight spot with your trucking business, we can help find you work that will be the right fit, every time! If you’d like to learn more about what we can do for you, we invite you to contact us today!