{"id":2470,"date":"2020-08-18T23:10:44","date_gmt":"2020-08-18T23:10:44","guid":{"rendered":"https:\/\/quicktransportsolutions.com\/blog\/?p=2470"},"modified":"2020-08-18T23:10:45","modified_gmt":"2020-08-18T23:10:45","slug":"what-is-the-current-state-of-the-trucking-industry","status":"publish","type":"post","link":"https:\/\/quicktransportsolutions.com\/blog\/what-is-the-current-state-of-the-trucking-industry\/","title":{"rendered":"What is the Current State of the Trucking Industry?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Across the globe, COVID-19 has upended nearly every industry you can think of. And although the trucking industry has remained essential, the transportation sector has faced increasingly strong financial headwinds. While there have been gains made in industrial production and housing, increased in COVID-19 cases across the country have created a lot of uncertainty for trucking companies. Fortunately, <a href=\"https:\/\/quicktransportsolutions.com\/blog\/top-tips-to-keep-your-carrier-fleet-safe-and-healthy\/\">we are here to help<\/a>. <\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">                <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, where does the trucking industry stand? Looking at data\nprovided by the FTR transportation research institute, the current forecast for\ntruck freight loadings looks to be just under 6% of where it was last year.\nAlthough there have been some improvements in industrial and housing starts,\nthe trucking industry is still on somewhat unstable ground. Many do not expect\nvolumes to recover to pre-crisis levels until at least the first half of 2021. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Current Situation<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Spot freight numbers are currently trending in positive\nterritory, but how long will that last? Two weeks ago, the total freight and\ndry van numbers were the highest they have been in nearly two years, though\nthere was a dip from the Fourth of July holiday. Still, many industry insiders\nare saying it is soon to know if a few weeks of solid growth will lead to a\nlarger recovery in the freight sector. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s also have a look at truck utilization statistics,\nwhich have a direct impact on the final rates used on the market. Looking at\nthe share of commercial motor vehicles actually engaged in moving loads, many\nfeel the industry has basically bottomed out, but is also still in a precarious\nposition. At this stage many industry insiders anticipate a steady improvement\nover the course of the next year, but there are still a lot of unknowns,\nespecially when it comes to COVID-19.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One bit of good news to come out of this whole thing is that\nfatality rates have dropped sharply, though most of that can be attributed to\nno one being on the roads these days. With few passenger cars out on interstate\nhighways, there are far less opportunities for accidents. While this is a good\nthing, it is a silver lining to an otherwise bad situation. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The primary factor driving the economy, however, is not road\nfatalities. It is more about what\u2019s happening with the number of new\nCoronavirus cases. The picture in the United States is currently very bleak,\nwith cases surging to more than 60,000 cases a day, more than double the\nprevious peak. In total, more than 3 million people have been diagnosed with\nCOVID-19 since the crisis began, and nearly 134,000 have died. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While cases are rising because of increased testing, the\nfact is that the percentage of positive tests is also rising, not just the raw\nnumber. This points to increased community transmission and a decreased\nlikelihood that many states and municipalities will be able to contain the\nvirus. If it were just more testing, the expectation is that the positive tests\nas a percentage would stay even keel. But that isn\u2019t the case. The United\nStates has almost tripled the positive test rate and we are seeing the\ninfection rate start to move closer to the tenth percentile. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Economy at Risk<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even worse, these numbers do not bode well for the overall\nstate of the economy. With Florida, Texas, and California shut down as COVID\ncases rise, only time will tell how this will shake out in the overall economy.\nTexas and California have been pretty aggressive in their efforts to contain\nthe virus, but will they prevail? What those states do have a big impact on\noverall GDP. With the energy and chemical market in Texas and the\nfood-producing regions of California and Florida under pressure, who knows\nwhere this could lead. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">FTR does not factor Congressional action into their forecasts because of how glacial the legislative process is. But there were a couple areas that merited their attention. The first is infrastructure funding and the second is pandemic stimulus.<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">                <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Why? Because it is highly unlikely we will see an\ninfrastructure highway funding measure pass until 2021. No matter which way the\npresidential election goes, it won\u2019t be until next year that serious attention\nis paid to infrastructure funding. While both the House and the Senate have\ninfrastructure bills on the docket, the two are way too different to expect a\ncompromise during an election year. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Have you heard? The Bureau of Labor Statistics reported a\nreturn of 4.8 million jobs in June from what we had lost when the economy was\nshuttered as COVID-19 exploded. This would wind up improving the unemployment\nrate to 11.1%. Yet, there are dark clouds on the horizon. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even more, if we look at where we are relative to February,\nthe seasonally adjusted data is still over ten percent below February levels\nthroughout the economy. What does this mean? That no real important sector of\nthe economy has fully recovered from the Coronavirus pandemic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you look closely at new unemployment claims, the country\ncontinues to see extraordinary numbers. How extraordinary? Well, over 1 million\npeople reported recently for unemployment claims and it has not changed all\nthat much in the last several weeks. Even after nearly three months of this\ncrisis, we still have not seen any major abatement of overall unemployment\nclaims.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Data through the end of June demonstrated that just over\neighteen million people continue to get unemployment payments. Prior to the\nCOVID-19 crisis, the highest the United States had seen apply for unemployment\nbenefits was just over six million. Obviously, this crisis has blown those\nnumbers out of the water. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Still, can Congress do something? The extra six hundred per\nweek that workers were receiving in unemployment being funded by the federal\ngovernment runs out at the end of this month. That money is also going to some\nindependent contractors and sole proprietors \u2013 meaning owner-operators. Unless\nCongress extends additional benefits, the flow of cash is going to end soon,\nwhich will leave many people unemployed, which will result in a massive\nreduction of capital pumped into the economy. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>An Improvement in Trucking Jobs?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If one were to look at trucking jobs in particular, on a\nseasonally adjusted basis, the trucking industry added just over 8,000 new\njobs. While that may sound like good thing, inreality, it is a fraction of the\njobs lost in the trucking industry in April and March. How so? Well, since\nFebruary of this year, the industry has lost nearly 87,000 jobs. This is a\ncatastrophic number.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The trucking segments that saw the biggest impact were\nless-than-truckload and household goods. The only exception was the urban\ndelivery market, which, thanks to e-commerce, has been a growth market for the\ntransportation sector. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Fortunately, the Payroll Protection Plan loans have helped\npreserve some trucking sector jobs. Recently released data on PPP recipients\nshowed that nearly 12,000 companies that fall under truck transportation got\nloans of $150,000 or more, and nearly 43% of those were local general freight.\nThis represents a problem for the industry. Fortunately, Congress recently\nrelaxed the rules on who qualifies for PPP loans.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another problem is that recent changes to the rules for PPP\nloans mean some of the jobs they support may not come back until later in the\nyear. These represent permanent job losses in the broader economy. Fortunately,\nthere are bright spots. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Light at the End of the Tunnel<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Record-low mortgage rates may help drive a resurgence in the\nhome-building market, which could be good news for all sorts of freight loads,\nwhether it be interior design furnishings or basic construction deliveries.\nWhile the trucking industry has seen industrial demand tick back up, there\nseems to be a disconnect between trucking and carload recovery numbers that\ncould represent a major problem for industrial deliveries. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Many hope that we will see demand pick up as things have\nstarted to open and started moving that inventory through the system.\nObviously, truck freight will benefit from this new paradigm. The fact is the\nindustrial sector was sitting on inventory and many are happy to begin seeing\nthat inventory move. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The problem is, there are issues in intermodal delivery. The data clearly shows we are not seeing the industrial sector picking up, even if there were good headwinds in the beginning. Take chemicals and metals as concrete examples. The industry has only recently seen increases there, and those two go into a huge amount of manufacturing.<\/p>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">                <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Many wonder if this is a short term recovery. The problem is\nthat if it is, it can\u2019t last. Many in the industry don\u2019t see trucking numbers\nstaying at the levels they are now, and especially as inventories come down and\nthe initial exuberance of the \u2013 post consumer lockdown \u2013 starts to dissipate.\nWhere this leaves the trucking industry is anybody\u2019s guess.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Across the globe, COVID-19 has upended nearly every industry you can think of. And although the trucking industry has remained essential, the transportation sector has faced increasingly strong financial headwinds. While there have been gains made in industrial production and housing, increased in COVID-19 cases across the country have created a lot of uncertainty for &#8230; <a title=\"What is the Current State of the Trucking Industry?\" class=\"read-more\" href=\"https:\/\/quicktransportsolutions.com\/blog\/what-is-the-current-state-of-the-trucking-industry\/\" aria-label=\"Read more about What is the Current State of the Trucking Industry?\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2470","post","type-post","status-publish","format-standard","hentry","category-trucking"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is the Current State of the Trucking Industry? - Quick Transport Solutions Trucking Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/quicktransportsolutions.com\/blog\/what-is-the-current-state-of-the-trucking-industry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is the Current State of the Trucking Industry? - Quick Transport Solutions Trucking Blog\" \/>\n<meta property=\"og:description\" content=\"Across the globe, COVID-19 has upended nearly every industry you can think of. 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