Trucking rates in the United States continue to soar with hardly any relief in sight for shippers. Demand is expected to remain strong throughout 2021 because consumer spending is buoyant. Imports pile up at container terminals because retailers are scrambling to ensure they have adequate inventories even if some investment pundits are predicting that it will take several months to reach pre-pandemic levels.
Segments like ecommerce, temperature-controlled trucking, and flatbed freight are already very busy and close to their limits. Transportation and logistics providers are expecting a second tailwind from the resurgent industrial sector that has lagged behind retail for the last few months.
The retail market is strong because of the growing demand from B2B moves. However, it has put additional pressure on trucking capacity and pushed prices up. According to estimates, trucking volumes are expected to return to pre-pandemic levels by the middle of the year. Meanwhile, the problem is the rising costs of toll and insurance including diesel prices.
A big problem faced by trucking providers is driver shortage which is expected to continue this year. Trucking companies have to pay more to recruit new drivers and retain personnel. The shortage of drivers has pushed prices up and has held back asset deployment. The shortage would have been much worse if drivers have not lost their jobs last year. Many trucking firms have stopped operations during the height of the coronavirus pandemic. Spot rates dropped below levels so that trucking companies can sustain their operations.
Small trucking operations bore the brunt of all the troubles and they have to cease operations. These small trucking companies and owner-operators comprise the majority of the US trucking industry. According to ATA, 91% of haulers in the United States have six or fewer trucks while 97% have 20 or fewer on their fleet.
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