For years, the trucking industry has been characterized as one full of ups and downs. In the past four years, it has been dominated by the changes forced by the Covid-19 pandemic, and many experts still bring it up as the reasoning behind the constantly shifting landscape for trucking and transportation. However, there are now those in the financial and transportation industries that claim trucking is about to make a turnaround and start trending upward. While this comes as exciting news for many carriers, it is not cause for premature celebration. Taking a tempered approach, Lionzone looks at what might come for the rest of the year. What is ahead for the trucking industry for the rest of 2024? Let’s find out!
So Far, So Good for 2024?
RTS Carrier Services said it best when they said: “The trucking industry is famously boom-or-bust. It’s a matter of when, not if, the market will rebound…” After a pandemic and years of inflationary pressures, trucking companies have struggled to make it through. Many trucking companies for the past four years have been attempting to survive in such a tumultuous industry, hoping against hope to make it to the next boom period. While many experts say that a rebound is on the horizon, others are not seeing enough of an increase in consumer spending and commercial demand to make any carrier recovery coming.
So, how is the trucking industry responding to the latest bust cycle? Firstly, many smaller carriers, particularly those with two or fewer trucks, have been forced to close their doors due to a myriad of factors, including unstable diesel prices and excess carrier capacity. In the early days of Covid-19, many consumers and retailers stocked up on supplies, creating a great deal of business for trucking companies. Opportunistic people bought a few trucks and started to pitching in where they could, carrying loads for extra money and building businesses that made sense at the time. However, when that period ended and immediate demand went down and inflation started to flare up, these small businesses began to feel the squeeze first. Now, into the second half of 2024, the economy and competition has weeded out many of these minimalistic carriers.
Another sign of a correction in the transportation industry that many experts are looking for is the rejection rate of load offers. In the first two years of the pandemic, rejection rates to carry loads of goods reached as high as 20%. This meant that trucking companies could pick and choose the loads they carried because there were so many being offered for good prices. When the boom ended and the trucking industry began to “bust,” this rate dipped to as low as 2.5% in May of 2023. Carriers are struggling to find loads to carry, so they are not rejecting loads, but taking any that become available. RTS stated that, for the market to be corrected, there has to be a higher rate of rejected loads than there are at this time; this would mean that there are more supplies to be carried than there are trucks to take them.
“School’s out for summer…” but the Trucking Industry is Kicking into Gear!
There is a myriad of issues that trucking companies will have to deal with for the remainder of 2024. Riviera Finance came out with a list things to look out for on the horizon while the trucking industry tries to find stable footing before the holidays. Here are a few things this group of experts says to keep an eye out for in the late summer and fall of this year:
- “The Rise of Last-Mile Delivery”
- The last four years have spoiled consumers. Instead of ordering an item online and having it delivered in a week or so, today, thanks to companies like Amazon, customers want their items NOW. This is pushing trucking companies to invest in ways to make the “last mile” of the delivery faster. For more on this topic, come back to the LZBlog in August! I will be diving into the future of Last-Mile Delivery and how it will affect the trucking industry!
- Expenses Associated with Trucking
- The price of diesel has gone down recently. However, the costs of everything else have gone up exponentially. That means that carriers are shelling out more money for necessities like insurance, and that will play a role in when a trucking company is able to bounce back from uncertainty.
- Fewer Trucking Carriers
- As stated above, many of the smaller trucking companies that popped up during the pandemic are beginning to close their doors. Unable to compete against the larger transporters, these small companies are leaving the industry and, therefore, streamlining it. According to Riviera, “This could lead to a tighter capacity in the latter half of 2024, potentially influencing freight rates.”
- Technology and Innovation
- There are so many technological advances coming down the pipe for trucking companies. From GPS devices to help truckers avoid traffic, to automatic-driving trucks, to hybrid trucks creating a greener industry, these innovations will cost some money but may create savings down the road. The transportation industry is constantly evolving, and it will need to continue to do so in order to survive.
Conclusion
The Transportation Industry is well known for being a field with many ups and downs. The Covid-19 pandemic in 2020 has brought four years of these boom and bust cycles. While many hope for a more stable footing for the rest of 2024 and into 2025, those who have been working in trucking for a long time understand that this may not happen. A great deal depends on the needs and wants of consumers, and if there is one thing that the industry seems to need to re-learn from year to year is that it will be the retailers and customers that determine what comes next.
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Meaghan Goldberg covers recruitment and digital marketing for Lionzone. A Patterson, GA native, after graduating from both Valdosta State University and Middle Tennessee State University, Meaghan joined Lionzone in 2018 as a digital recruitment strategist before becoming the social media manager.
Resources:
https://relay.amazon.com/blog/trucking-industry-forecast-2024
https://www.rtsinc.com/articles/forecasting-trucking-market-and-industry-trends-2024
https://www.pridetransport.com/news-and-events/trucking-industry-forecast-2024
