Every day Americans are living with the likelihood the country could fall into its second recession since the turn of the century and newly-minted truck drivers are uncertain about the future.
“We now believe the U.S. economy is headed for a mild recession in the coming months,” Greg Daco, chief economist for consulting firm EY-Parthenon, reportedly said. “While consumers will continue to spend freely on leisure, travel, and hospitality over the summer, a persistently elevated inflation backdrop, surging interest rates, and plunging stock prices will erode spending power, severely curtail housing activity, and constrain business investment and hiring.”
Business media outlets such as the Wall Street Journal predict unemployment will tick up to 3.7 percent by year’s end and 4.2 percent in 2023. It’s true the U.S. saw 8.6 percent inflation over 12 months through May and diesel prices at the pump show little sign of returning to pre-pandemic levels. That does not necessarily mean truck drivers will lose jobs or see a downturn in wages should economic contraction occur.
The country was short upwards of 81,000 CDL holders heading into 2022. Even with a diverse workforce emerging, the country is expected to need more truckers next year and beyond. In many ways, the trucking industry is something of a microcosm of the hiring landscape today. For example, the Wall Street Journal conducted a survey that indicates massive labor shortages persist.
“Sixty-three percent of small-business owners say that hiring challenges are affecting their ability to operate at full capacity, according to a June survey of more than 825 small businesses for The Wall Street Journal by Vistage Worldwide Inc., a business coaching and peer advisory firm,” the media outlet reports.
To fill positions, local driving outfits started offering incentives to employees who arrived on time and completed routes. Black Earth Compost began paying its 78 drivers a $3 per hour bonus for being on time and meeting expectations. The organic waste collection and compost-processing company’s owner pointed out that higher wages “stopped the hemorrhaging.” The essential point is that local route, last-mile, and tractor-trailer operators are likely to remain in high demand, come what may.
To illustrate the point, FedEx appears to have benefited from high diesel costs and onerous inflation. Known for doorstep deliveries, FedEx saw revenue rise 8 percent even though overall volume was down. The company passed along inflationary pain points and added surcharges. Operating income reportedly rose by 6.7 percent due to its Freight and Express wings improving to the tune of 67 percent and 20 percent, respectively.
Perhaps impacted by e-commerce giant Amazon, FedEx averaged 15.2 million parcels daily during March, April, and May, compared to 16.4 million during the same period in 2021. Yet, FedEx overcame seemingly crushing inflation as its Ground unit dropped by 23 percent.
What didn’t weaken was FedEx’s freight hauling sector where demand continues to outpace the number of men and women behind the wheel of Class 8 vehicles. Small, mid-sized, and large trucking outfits would be well-served to consider how FedEx weathered the storm. Regardless of business models, truckers are expected to remain fully employed through the impending recession.
Sources:
https://www.wsj.com/articles/recession-probability-soars-as-inflation-worsens-11655631002
When inflation is out of control and the dollar is not worth much, I use to like talking to my grandma about the depression years of the 30s, although it’s a different time since the 30s, we have many similarities as the 30s era, and it’s been brewing for years, hang on to what you have and watch for spending.