• ITVI.USA
    15,494.200
    152.800
    1%
  • OTRI.USA
    25.070
    0.290
    1.2%
  • OTVI.USA
    15,447.770
    158.270
    1%
  • TLT.USA
    2.700
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,494.200
    152.800
    1%
  • OTRI.USA
    25.070
    0.290
    1.2%
  • OTVI.USA
    15,447.770
    158.270
    1%
  • TLT.USA
    2.700
    0.010
    0.4%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
NewsTrucking

Trucking industry expected to remain on upswing through 2021

Despite economic conditions taking a dive due to COVID-19, the trucking market has persisted and looks to remain on an upward trajectory heading into 2021. The industry’s strong fundamentals have FreightWaves researchers suggesting that it may spark a multiyear upcycle for trucking.

In partnership with Blume Global and U.S. Bank, FreightWaves’ Freight Intel researchers have identified and analyzed the macroeconomic variables that shaped the dynamic freight landscape during the first half of 2020 in addition to forecasting what’s in store for the latter half of the year as part of a white paper, 2020 Q3 Shipper Rate Report.

As of late July 2020, contracted truckload volumes are up 27% year-over-year in addition to DAT national spot rates rising to 30% above 2019 levels. FreightWaves believes these conditions favor carriers by giving them the upper hand in negotiating leverage. 

This is a promising sign for carriers, especially for those entrenched in the manufacturing, energy and automotive sectors as truckload and LTL volumes were severely impacted in the second quarter of 2020. This period brought about economic woes as the U.S. economy entered its first recession since 2011.

The white paper reports that the nation’s GDP likely fell 30% to 50% in the second quarter. However, both shipments and freight spend reportedly fell less than U.S. GDP overall as the economic decline affected service businesses the most.

In fact, tender rejections averaged 7.47% in Q2, 258 basis points (bps) higher than the previous year. The white paper also reports that contract volumes and spot rates averaged 6.8% and 2.8% higher year-over-year in the second quarter, respectively.

FreightWaves believes that conditions favor positive load volumes in the second half of 2020 (flat up to 5%) on a year-over-year basis and moderate upward pressure on spot and contract rates. Carriers are also projected to fare extremely well as the capacity (supply) side is expected to present a lower vulnerability to downside risk than typically experienced in a freight recession. This is due to the industry’s 18-month cleansing of supply.

Risk factors are still a concern, however. Back-to-school (BTS) season is in full swing — an estimated $100 billion event, according to the National Retail Federation. If schools nationwide go fully virtual, this could have major economic and freight ramifications as FreightWaves estimates that BTS spending represents 7%+ of overall retail spending in the third quarter. November’s presidential election may also shift initial forecasts as a Democrat victory may bring about rollbacks on Trump’s tax cuts, which could have a major effect on the stock market and economy as a whole.

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Jack Glenn

Jack Glenn is an Editorial Associate for FreightWaves and lives in Chattanooga, TN. He is a recent graduate of the University of Georgia Terry College of Business where he earned a degree in Marketing.
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