Despite the shortage in certified truck drivers that has been raging on in recent years, last year brought big numbers in layoffs throughout the entire trucking industry. Left and right, drivers lost jobs and carriers large and small closed doors. In December 2019, 3,500 truck drivers lost their jobs with a total of 6,600 for the year. Many that managed to keep their jobs saw rates slashed.
More Than Drivers Affected
Carriers aren’t only cutting drivers. Many positions being cut in the trucking industry are administrative and non-driving positions.
The downturn in the trucking industry has a far-reaching impact. Carriers stopped adding to their fleets, purchasing 64% fewer new trucks than the prior year. Popular engine manufacturer Cummins announced that in Q1 2020 it will lay off 2,000 employees, and Volvo Trucks is laying off 700 people in January.
Ups and Downs
The trucking industry has a history of ups and downs, and often where the trucking industry goes, the economy follows. The economy has been on an upswing but a decline in the demand for trucks usually indicates that it’ll soon go the other way. The Great Recession that began in 2008 was preceded by a downturn in the trucking industry in 2006. Unfortunately, this is not a tried and true indicator of an impending recession. While a national recession is almost always preceded by a recession in the trucking industry, the reverse isn’t always true. In fact, the trucking industry experiences twice as many recessions than the national economy so trouble in the trucking industry doesn’t necessarily mean that the country will go through an economic recession.
Slowing in the Manufacturing Sector
Since the trade war with China reached a stalemate and tariffs were implemented, manufacturing has slowed. Tariffs cost consumers and importers $1.4 billion a month with $165 billion in trade being directed to other countries, demand for goods has slowed and along with it, manufacturers aren’t producing, retailers aren’t buying, so carriers have less to ship. Jobs up and down the supply chain have been affected.
Light at the End of the Tunnel
Whether such a dramatic downturn will turn around quickly or we just see more of the same for 2020 still remains to be seen. The hope is that 2020 will bring a light at the end of the tunnel. Talks with China are progressing. If the US and China come to a deal on trade so tariffs are lifted and the U.S., Canada, and Mexico come to an agreement on NAFTA, there should be an upturn as manufacturing speeds up again to meet the demand, and freight begins to move again.
If you’re a driver who is looking for freight, Direct Freight Services can help you find loads to keep your truck on the road. Direct Freight Services is a full-service load board that allows truckers to find loads and companies to post their available loads. The Direct Freight website also has many useful features such as a mobile app, mile calculators, fuel price data, weather conditions, turn-by-turn truck-specific routing and more.
To see how Direct Freight can get you back out on the road, go to DirectFreight.com today!