There has been serious talk about growth in the trucking industry on the horizon. The Chainalytics-Cowen Freight Indices shows that freight rates have increased every week for several weeks, and industry publication FreightWaves has reported that volume growth has been climbing since July 31.
Strong earnings from Target and Walmart indicate that retail is stronger than these key indicators had depicted. Essentially, consumers are buying more, and that means trucks are moving more, too. In fact, the American Trucking Associations’ Truck Tonnage Index jumped by 7.3% in July 2019, from July 2018.
The Challenge of Freight Forecasting
Trucking, like retail, is very cyclical. It’s not uncommon to experience big peaks and big lows that can often catch trucking companies, big and small, by surprise. These ups and downs make it difficult for retailers, manufacturers, and these trucking companies to forecast demands for years down the road.
Last year, trucking companies across the nation purchased new equipment in order to keep up with the demands. According to Michael DiCecco of Huntington Bank, trucking companies had to wait up to six months for their new trucks. By January of this year, there was a backlog of 300,000 trucks, which is triple the normal rate.
Some experts have even debated whether trucking was in a recession at all this year, which is a theory some have put forward. Cowen analyst Jason Seidl has said that it wasn’t that 2019 has been bad, but more that 2018 was very good. It’s also been said that, if you look at the year-over-year comparisons, it’s simply tough to beat the consumer boom last year.
As the market fluctuates like it always does, truck drivers are in higher and higher demand—especially as the holiday season fast approaches. If 2019 seems slow for the trucking industry, it’s most likely because of the records broken last year.
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