The shortage of truck drivers was seen as one of the biggest impediments in logistics over the pandemic period but has now settled. The American Trucking Association estimates the US trucking sector was 78,000 drivers short last year (2022), which is a tad lower than the record-setting 80,000 from 2021.
In 2021, truck drivers employed by trucking firms were minimized as high freight rates encouraged many drivers to leave or have their contracts terminated. The reduction in volume in the second half of 2022, mixed with soaring fuel prices, forced a growing number of drivers to seek employment again.
A survey from the Professional Driver Agency and Conversion Interactive found 22.1% of drivers had reported lower mileage over the past 6 to 12 months as a result of reduced freight volumes, while another 27.2% reported frequent shifts in their mileage.
The speed at which the market turned from heavy demand to staggeringly slow, has changed the employment outlook for the logistics industry as a whole. As 2022 logistics markets thinned, firms were forced to reassess their operations as inflation impacted their decision-making.
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Firms are beginning to rehire after the 2022 slowdown as logistics becomes in demand once more – though a second freight recession is likely on the rise. Since the beginning of 2022, spot rates have declined by 27.6%, (according to the FreightWaves National Truckload Index).
Since transportation and logistics slowed in 2022, investors have become more risk-weary and have minimized exposure to companies with less-proven track records. Transaction values in late November totaled $52 billion across 380 deals compared with 600 deals for $181 billion total in the year prior (2021).
2023 will see investors reignite their interest in less precautionary transactions as the logistics industry picks up once again.
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