A consensus has emerged among economists that the U.S. is heading into a recession as core inflation persists and the Federal Reserve raises interest rates. Although low-income families are likely to take the brunt of an economic downturn, truck drivers may not be significantly impacted.
“I think you have to expect that there’s more volatility on the horizon now. That doesn’t mean for sure that we have a really difficult economic scenario. But on the distribution of outcomes, there’s a good chance that we have a recession in the United States,” Goldman Sachs CEO David Solomon reportedly said.
Solomon’s sentiments have been largely echoed by experts and Bloomberg News recently ran the splashy headline: “Forecast for US Recession Within Year Hits 100% in Blow to Biden”
The White House has targeted the oil industry as its policy seeks to transition the country from fossil fuels to electricity, which, oddly, is primarily driven by natural gas and coal. Demand for truck diesel and passenger vehicle gasoline continues to outpace the supply from a hamstrung oil industry. As trucking industry professionals are well aware, the price of diesel impacts freight rates and agriculture, and those costs are passed along to consumers.
The concerning questions for over-the-road and regional route truckers revolve around 2023 employment, salaries, and job security. Based on the current and predicted supply chain data, truckers may need to adjust. However, it’s highly unlikely demand for CDL professionals would wane.
In terms of hauling containers from seaports, a great realignment has been taking place since the major supply chain bottleneck in 2021. Atlantic Ocean ports have outpaced the West Coast in terms of container volume. Truckers on the Eastern Seaboard pulled 9.9 percent more import containers year-over-year. Imports on the West Coast dropped by a stunning 8.7 percent, month-over-month, in August alone. Truckers can anticipate increased opportunities along the Gulf and East coasts. That’s good news for independent truckers as California’s AB5 law effectively bans self-employment.
This is not to say the East Coast will boom in 2023. Industry insiders have noted the import spike of 2021 is in the rearview and freight movement is already entering a lull. Through the first six months of this year, twenty-foot equivalent units rose by 3.6 percent. Some anticipate a 2.9 percent decrease during the second half of 2022.
“The growth in U.S. import volume has run out of steam, especially for cargo from Asia,” Ben Hackett, partner at Hackett Associates, reportedly said. “The declining demand is forcing significant cuts in ship capacity being offered by carriers, and the historical peak season increase in shipments has not appeared, adding to the woes of carriers.”
By that same token, the trucking industry carries a driver shortage of 80,000 and data has emerged that companies are also experiencing technician shortfalls. Given retirements, attrition, and the fact the U.S. heads into this uncertainty with a low 3.5 percent unemployment rate, truckers are likely to maintain their leading job security. Groceries may get even more expensive, but people need to eat and 72 percent of all goods and materials are delivered by trucks.
Sources: cnbc.com, bloomberg.com, wsj.com, scmr.com
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