Within the industry as of late, there seems to be talk about whether the trucking sector is heading into a freight recession. This talk is only coming a short while after the industry was recovering from the impact of the COVID-19 pandemic.
Statistics from the Federal Reserve Board’s industrial production index for manufacturing show that April 2022 was the second-highest reading of a potential dip since the end of the 2008 recession. Seasonal industrial production has been pointing aggressively upwards which counters the freight recession discussions.
Another indicator that points towards a recession is abnormal pricing behavior in many sectors of trucking and transportation (via Bureau of Labor Statistics). General routes for freight trucking (fleets of any size), long-distance, and overall truckload prices have increased 5.4% from March to April. Going back to the year-over-year increase; 34.4% is the overall price increase across all truckload boards in the transportation industry. This is especially prominent for long-distance trucking as prices jumped by 2.5% from March to April.
Though the industry has progressed significantly, new data is constantly released that suggests the freight market is slowly moving backward. This impact on the industry may not affect already established 3PLs and transportation fleets but might affect carriers that are newer and have higher costs within the market. Smaller carriers could also end up struggling with higher fuel prices due to their limited ability to purchase diesel fuel at wholesale prices.
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While the industry continues to adapt and recover from the COVID-19 pandemic, the recovery may be halted. This is according to new data that points toward signs of a recession that may only impact newer and less established freight companies. The industry is already paying close attention to data analysis and is finding ways to efficiently handle economic difficulties and get supply chains back online.
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