Predicting the future is a mug’s game. What looked to be a rosy and positive outcome just a few months ago could quickly turn into doom and gloom in no time at all, or vice versa.
Back at the beginning of 2019, outlooks were overwhelmingly positive for the trucking industry. After the record-breaking profits of 2018, calls were for the industry to keep growing, though at a slower pace. Countless companies were buying new trucks and hiring more and more drivers. Things couldn’t have looked better. Unfortunately, now that we are midway through 2019, it appears that rosy outlook was somewhat mistaken.
The State Of Summer 2019
In a note to freight investors, Morgan Stanley’s regular freight survey shows that rates expectations have shrunk to 2016 levels. Although the industry is not in as dire straits as the recession-level status back then, the gross earnings of many truckers have received a massive hit as freight rates dropped over the last six months. Since last June, the on the spot market has fallen over 50%.
The result of this is that many truckers are worried that their gross earnings will barely cover the costs of maintenance and other business expenses over the rest of the year. Due to the decisions made by companies back in 2018 when the market was booming, there is currently an overabundant supply of both trucks and drivers to meet their needs, leaving some truckers suddenly under pressure to find work.
A Rosy Picture Ahead For The Trucking Industry?
The good news is that the trucking industry tends to be cyclical when it comes to profits. A poor six months in the first half of 2019 could rapidly become a banner 2020. Even the remaining half of this year could start to show strong signs of recovery as the U.S. economy is currently very, very strong. Back in June, over 224,000 jobs were added in multiple industries (including construction, manufacturing, social assistance, and health care). This could bode well for the freight industry heading into the upcoming year. However, as we stated above, predictions are far from certain.
With the current trade war with China in full swing, along with the slowing of the economy in many European and Asian countries, it can be difficult to guess exactly what will happen going into 2020.
One thing that you might be able to count on, however, is the continued modernization of the trucking industry. Over the last few years, companies such as Amazon, Walmart, and Uber have been working to improve the lines of communication between retailers and truckers.
Recently, Oracle, a $39 billion cloud-computing company, announced that they will be working with Loadsmart, a digital freight broker, to help match customers’ loads with truckers. These improvements in freight logistics could help remove the middleman for companies while also helping truckers avoid the hassle of having to drive hundreds of miles from one job to the next.
Of course, time will tell if these attempts at modernizing the freight logistics industry will bear fruit in 2020, but it is a sign that the trucking industry is well-positioned to grow into the future. As a company that is dedicated to finding you the best trucking talent possible, keeping on top of trends and the health of the logistics market is a top priority for us. If you’re looking to expand your workforce, or looking for work, we can help you! Contact us today to discover exactly what we can do for you.