Trucking Industry Remains Strong Despite a Slowing Economy
U.S. economic activity is beginning to slow, but trucking freight will remain strong throughout the year, and driver wages will continue to increase.
for the , told attendees at in Florida that even though the rate of economic growth will slow, it will remain strong.
“I am not worried. In fact, I think we’re going to struggle as an industry to haul all of the freight we’ll be asked to haul next year,” he said, adding that capacity will remain strong.
The three buckets of freight—household consumption, construction and industrial—were strong last year. “Even if they come down, they’re still at good levels,” Costello said.
However, large truckload carriers are struggling to expand, with most contracting. In 2021, for-hire power units in the truckload sector decreased 5.3 percent. They increased 3.2 percent in the less-than-truckload sector. Costello said fleets have been unable to hire drivers and are selling parked trucks. Additionally, leased-on independent contractors are moving to the spot market.
Costello told attendees that while the length of haul had been falling over the years, that changed in late 2019-2020 and is increasing, growing 2.2 percent in 2019, 8.4 percent in 2020 and 0.3 percent in 2021.
The driver shortage remains a challenge. Drivers have left the industry, and there are not enough new entrants. As a result, driver pay will continue to increase, Costello said.
While women make up nearly half of the U.S. workforce, they represent just 8 percent of drivers. “If we could get that number to go up, you could solve the entire driver shortage,” Costello said.
The pilot program included in the Infrastructure Investment and Jobs Act is designed to bring 3,000 younger drivers into the industry. “It won’t solve the driver shortage, but it will help,” Costello said.
Trucking hauls 70 percent of all the freight tonnage in the United States, and, overall, Costello said the pandemic years have been good to the trucking industry. Demand for goods increased and carriers were able to take advantage of higher rates. Despite challenges, such as the driver shortage, insurance costs, and fuel and equipment prices, Costello said a freight recession isn’t on the horizon.
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