Trucking Market Expected to Expand Capacity in 2021
A recent surge in purchases of trucks with a gross-vehicle-weight rating of 33,000 pounds indicates the trucking industry is more optimistic today than it was at the start of 2020.
With more trucks on the road this year, their challenge will turn to finding drivers.
Freight carriers, like every industry, seek each year to balance the need for growth vs. cost control. If trucking companies extend their fleet beyond demand, they have to drop prices to keep rolling. If their fleets cannot meet demand, they leave money on the table.
What they know with relative certainty this year is that spot rates have expanded too much and sustained for too long not to see growth in capacity. The question is not “if” but “when.”
Employment levels in the trucking industry have fallen from 15.3 million in November 2019 to 14.8 million in the same month in 2020. While trucking companies have not restored their ranks to pre-pandemic levels, freight volumes have expanded beyond where they were when the pandemic began.
The result has been unprecedented growth in spot market rates in the second half of 2020.
Carriers that have been reluctant to invest in growth after being hit hard by low volumes in April and burned by oversupply in 2019 have begun to show a renewed willingness to invest.
A recent surge in Class 8 truck orders—the over 33,000-pound category—signals a wave of capacity coming online in the second half of 2021, some of which will be replacement buying.
Still, expect more trucks, and with that increased capacity, expect the industry to struggle to find drivers. Driver schools have been operating well below capacity, and the Drug and Alcohol Clearinghouse, which required compliance beginning a year ago, has removed thousands of driver candidates from the pool.
Source: Freight Waves