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JANUARY/FEBRUARY | TCA 2021
Tracking The Trends
Predicting
Industry experts optimistic, but driver shortage may cloud outlook
By Cliff Abbott
If 2020 proved anything it’s that forecasting
the future is far from an exact science.
After all, who predicted a worldwide pandemic
and the resulting economic recession?
Still, business planners need some
idea of what’s coming. Three industry experts
offered their thoughts.
First, expectations for the overall economy.
FTR Intelligence’s Vice President of Trucking
Avery Vise is cautiously optimistic. “The next
year, by and large, looks to be pretty good, but
there are some risks,” he said.
U.S. Xpress CEO and President Eric Fuller
thinks the industry will continue progress made
since the recession. “The economy seems fairly
robust. I don’t see that changing in the near
term,” he said.
Britton Transport President Jim Stokeland
agreed. “I believe it will continue to be strong
through mid-year and maybe longer,” he stated.
With one COVID-19 vaccine approved for
use in the U.S. and others likely to be approved
in late 2020 and early 2021, there’s a reason
for optimism. But the logistics for distribution
of any vaccine, including how soon it can
be administered to a large enough segment
of the population to allow for a return to normalcy
has yet to be finalized as of press time.
Vise is concerned about further lockdowns,
however. “The biggest risk is in the upswell in
COVID-19 cases,” he stressed. “We don’t
know what government will do.”
Capacity was a big issue to start 2020.
Freight rates were expected to be stagnant or
possibly deteriorate because of excess capacity
caused by near-record truck sales in 2019.
Indeed, sales of new Class 8 trucks in the first
quarter were 24.3% behind the same period of
the prior year. As the effects of the pandemic
hit, second quarter sales fell 51.2% behind last
year’s pace.
The market intervened. The goods side of the
freight market pushed the number of available
loads higher at a faster rate than drivers could
return to work. The result was record-setting
spot rates, with contract rates beginning to
follow. Truck sales increased in the following
months, ending the year with sales numbers
similar to 2016 and 2017.
Unfortunately, while the economy is coming
back, many of the drivers who left the industry
are not. “It may be that for the first time we actually
have a driver shortage,” quipped Fuller.
“Our problem will be finding drivers.”
Vise provided a list of reasons drivers
aren’t coming back. “We expected capacity
to come back as soon as we needed it after
the recession, but the fact is that it hasn’t
happened.” One reason, he said, is that many
have simply retired. “Whether it’s frustration
with ELDs, automated transmissions, a
reaction to the COVID-19 pandemic, or what,
they’re hanging up the keys,” he said, adding
that “there are other factors that indicate we’re
facing an unprecedented driver shortage.”
One factor is fewer workers overall. “Statistics
show that labor participation is a full
two points below where it was before the recession,”
Vise explained. “That doesn’t seem
like much, but 2% of hundreds of millions of
workers is a significant number.”
Another factor is a dramatic surge in the
number of new carriers. While monthly registrations
have only reached 4,000 a few times
this century, they have been over 5,000 for five
consecutive months, exceeding 7,500 in one
month. Vise thinks that owner-operators who
lost contracts or miles responded by obtaining
their own authority and taking advantage of
record-high spot rates.
Then, there are drivers and owner-operators
who return to trucking, but in a different capacity.
“Consumer spending has been in goods instead
of services,” Vise explained. “We’ve seen
reports that show we’re down about 2% on
total spending, but up 8% on goods.”
Those goods must be delivered by someone.
According to the Bureau of Labor Statistics,
parcel/local delivery jobs have been steadily increasing
for a decade and jumped nearly 8% in
2020 alone. Drivers are finding ways to earn a
living and be home each night.
14 TRUCKLOAD AUTHORITY | www.Truckload.org TCA 2021