For truckload carriers and service providers like TitanTransline.com, truck capacity has been at its tightest since 2018, as noted by executives. They’re working on changing that, noting that arguing rate hikes are necessary in order to support more wage hikes for truckers, so they warned shippers to get rate increases in 2021.
Knight-Swift Transportation Holdings President and CEO David Jackson says that the lack of truckers to account for current demand is what’s driving up truckload rates in the industry. He and other trucking firm executives state that they need to raise rates to up the salaries of truckers which, in turn, they’ll use to attract more drivers in order to meet demand.
Jackson reports that a lot of truckload carriers like TitanTransline.com are agreed that contract rates will go up in 2021, around the low double-digits, with forecasts sitting around 10-15%. Some are saying that that’s the number they’re aiming for but, regardless, shippers should still expect rates to go up.
Data from the Labor Department says that the number of for-hire trucking employees went down by 73,200 in September 2020 compared to September 2019. In August 2020, the number of people employed as long-distance truckload production employees, which include drivers, dropped to 443,500, which is a 26,500 year over year drop, and a 23,800 drop from 2020’s peak at February, as noted by data from the US Bureau of Labor Statistics.
Trucking executives explain that that is a significant gap from current demand, with COVID-19 as the primary cause.
American Trucking Associations Chief Economist Bob Costello says that at least 30,000 truck drivers in the region have tested positive for COVID, with nearly 24,000 having opted to throw in the white flag and not return to duty.
During an earnings call in October 29, Schneider National President and CEO Mark Rourke says that driver availability is the hardest it’s been in his 30+ years working in the trucking industry. They added that it’s a well-documented fact that new drivers are hard to come by, with fewer new CDL graduates from trucking schools.
Landstar System President and CEO Jim Gattoni says that independent owner-operators have begun to make their comebacks into the market, feeling comfortable with the market’s performance following the worst of the pandemic’s effects on the industry.