Lingering effects of the coronavirus pandemic, a slate of new government policies, and ongoing economic uncertainty will deliver a challenging year for the trucking industry in 2021, according to an economic forecast from truckload carrier U.S. Xpress Enterprises, released this week.
Top on the list of challenges is a continued reduction in truckload capacity, which the company says will be driven in large part by a dearth of drivers as 2021 gets underway. Reduced commercial driver’s license (CDL) training and the launch of the Drug and Alcohol Clearinghouse last year has resulted in nearly 200,000 fewer drivers in the industry, the company said. A new round of stimulus dollars could compound the problem by keeping drivers from starting a career or coming back to the trucking industry—factors that may also contribute to driver pay increases, they said.
Contact and spot rates are likely to climb in 2021 as well. The combination of fewer drivers, a continued increase in freight demand, and reduced capacity will spur contract rate increases of between 8% and 15%, they said, while spot rates are likely to trend upward though the fall.
Ramped up government spending will also have an effect, as Democrat control of the Presidency and Congress ushers in a slate of new policy goals, including unemployment spending, insurance initiatives, and infrastructure plans.
“Additional unemployment assistance and stimulus dollars will stimulate consumption (and bolster freight volumes) while sidelining drivers from returning to the labor market,” according to the forecast. “A proposed increase in mandatory insurance minimums for carriers could drive many smaller players out of business. Additionally, the new administration is planning a bold infrastructure program which will spur a slew of construction projects across the country that could induce drivers to leave the labor market for jobs closer to home. These factors could have long term ramifications impacting demand into 2022 and beyond.”
The forecasters predict slow economic growth overall early in 2021 leading to a steady recovery into the second half of the year.
“The coronavirus pandemic continues to impact our industry in ways we couldn’t have imagined a year ago, and those challenges will reverberate throughout 2021,” Eric Fuller, U.S. Xpress President and CEO, said in a statement announcing the forecast. “I’m proud of our men and women who have been on the front lines, delivering essential goods throughout this pandemic. This will continue to be a challenging year, but I’m confident it will end on a positive note.”