Trucking companies have seen some challenges in the last year, but the industry has proven resilient. Despite increases in fuel prices and supply-chain disruptions, staffing needs have risen. According to the American Trucking Associations, as of 2022, more than 800,000 long-haul trucking jobs are currently available. Trucking opportunities will only surge, with the e-commerce industry expected to grow continuously.
Trucking industry during a recession
Despite concerns about a recession in 2023, trucking companies have taken measures to protect their assets. Inflationary pricing models have helped offset high operating costs, including the cost of diesel gas. According to Freight Waves, trucking companies with long-standing contracts will have the capacity to survive a recession. Contract rates may dip, but the effect should only be temporary.
While volatile, public trucking company earnings have not seen much negative effect from the economic downturn. The Dow U.S. Trucking Index shows an increase of just over 20 percent through the second quarter of 2023. The companies have combated the potential of a recession by keeping rate hikes at a minimum. Trucking businesses have also saved by owning vehicles instead of leasing fleet vehicles. Lease payments have gone up due to rising truck costs. Over the past two years, used truck prices have appreciated at an average rate of 30 percent. Owning and following a strict fleet maintenance schedule will save a company in the long run.
Benefits of trucking jobs during a recession
The majority of the country’s freight is moved by trucks. According to the Bureau of Transportation Statistics, trucks move more than two-thirds of all freight volume. Trucks are involved in the transportation of all of the top ten commodities in the United States, including:
- Mixed freight
- Food items
- Other types of fossil fuels
Individuals turn to fleet jobs as a way to protect their incomes. The overwhelming majority of truckers get paid by mileage instead of salary, meaning there’s more equality regarding earnings. With a mileage-based earnings model, ethnicity and gender wage gaps don’t exist.
The need for trucks to transport goods is a given. Even during a recession, trucks must still transport major goods throughout the country. Product demand may wane, but routes will always remain open. Truck drivers experience job stability, especially during challenging economic times. Many factors will create more trucker jobs, especially in the near future. E-commerce growth of 8.9 percent in 2023 and 9.4 percent in 2024 are expected, will activity tapering down slightly through 2027, according to industry forecasters. With more goods ordered online each year, there will be a continued need to move these goods to their destinations.
To help with the shortage of drivers, new truck driving schools are being opened or expanded. Expanding the availability of CDL programs will help get newly trained drivers on the road faster than ever. Truck driving programs can take as little as four weeks.
How is the Trucking Industry Doing?
Job outlook rates from the Bureau of Labor Statistics also support how truck driving is a stable profession. Between 2021 to 2031, heavy-duty and freight-driving jobs will increase at an average rate of 4 percent. Each year, an estimated 260,000 new trucking jobs will open up. The new jobs will come from a growing number of truck drivers nearing retirement age.
The states with the highest number of trucking jobs include:
The states with the highest average wage for truck drivers are:
- New Jersey
- New York
How to combat a trucking recession
Transport Topics reports that industry experts have advised companies on keeping operations going in the event of a recession, including maintaining liquidity. Additional advice was for companies to have complete financial transparency as a way for employees to stay abreast of any expected downturns. Panelists for Transport Topics also anticipate an economic recovery by late 2023.
Making job cuts isn’t recommended to stay afloat during a recession. Creating a plan can help companies avoid layoffs, and wage cuts should only be considered as a last resort. Executive pay is often lowered instead of driver rates if salary reductions need to occur.
A mistake that companies make during a recession is reducing retention efforts. Businesses that keep up with employee recruitment and retention programs will fare better in changing economic conditions. Finding new drivers, properly training them, and ensuring retention, are vital steps for any fleet. Fleets with new hires can breathe life into a stagnant workforce. Engaged drivers achieve company goals and build brand trust. Companies can attract better employees by offering benefits such as guaranteed pay packages and paid traffic time.
Although a recession can seem terrifying, especially as a prospective or new driver, don’t worry. As soon as recovery starts, demand for drivers will always surge. Trucking is a stable industry with positive growth projects despite a predicted recession. A commercial license is an investment that will pay for itself almost immediately.