BLOOMINGTON, Ind. – The North American economy is strong, but capacity is to remain tight for the remainder of the year, according to experts who spoke during FTR’s State of Freight webinar last week.
Avery Vise, v.p. of trucking research, said overall the economy is strong, and most key indicators in transportation are positive. However, home sales are tapering off because of home prices, which could stimulate housing starts, he said.
As far as the market demand index, during the most recent week – week 23 – there was a record number of loads posted.
“This was not unexpected,” explained Vise, who said International Roadcheck falls on this week, which means many truck drivers take time off, and it is also the start of the holiday season. “So we always see a blip in the spot market then…we may see in the next week or two that level coming down from this record high.”
And while the spot market it hot, Vise said this is normally how things go this time of year.
“We sound like a broken record,” Vise said. “We’re seeing full utilization, and project continuing to for the remainder of the year with only possible modest softening toward the end of the year, but not because of lower demand but because of increased infrastructural capacity.”
Given the capacity situation, Vise said, yes, rates are increasing.
Some more good news, according to Vise, is that aggressive recruiting efforts are paying off.
“Over the past year the for-hire sector has added 24,000 payroll jobs,” Vise said.
Vise added there was a slight downturn in April, though FTR suspects this is because carriers are drivers called it quits after the soft ELD enforcement was over.
“Given the demand in the market, you might think that trucking should be adding more jobs, but let’s consider what trucking is up against,” he said. “Two of the biggest competitors are construction and manufacturing. Between them, those sectors in the last year have added 37% of the entire payroll employment of the trucking industry. These are two of the most important sectors for freight so it’s a bit of a double whammy in the driver shortage arena.”