Craig Fuller, CEO at FreightWaves
5 min read
Industry economist projects that 600,000 active drivers could be eliminated from trucking
The Calm Before the Storm: Freight’s Current Reality
The freight industry is experiencing what experts describe as one of the most interesting times ever in freight—though unfortunately, not in a positive way for most participants. Motor carriers and freight brokers across the spectrum are feeling significant pain from weak freight volumes and a rapidly changing operating climate. What we’re witnessing appears to be the calm before a significant storm, with indicators pointing toward what could become the largest capacity washout in trucking history.
With the risk of the market eliminating 600,000 active drivers, the largest capacity purge in history may be coming, bringing COVID-like spot rates. The difference this time is that there won’t be a flood of immigrants created by Biden’s open borders, which offered an endless supply of truck drivers. The capacity relief valve for shippers and brokers is forever shut, meaning carriers will have to pay up in terms of higher pay and bonuses for truck drivers. Capacity will also be much harder to find.
Factors Contributing to the Freight Market Decline
Freight volumes have dramatically decreased, with year-over-year figures showing a staggering 18% decline. This precipitous drop has created severe challenges for motor carriers struggling to find loads and for freight brokers operating with minimal volume to sustain their businesses.
