An Uncertain Start to Trucking in 2020

It’s the first full week of the new year and the trucking industry if off to an interesting start. In this Transport Topics’ article, author Roger Gilroy says, “The signs are mixed for trucking. Expectations for an environment marked by weaker freight demand, pressure on profitability, higher-priced diesel and falling truck and trailer production mix with lingering talk in some circles of a possible recession. An uncertain national political environment could also chill business outlooks.”

In addition, truck availability will be tighter at the start of 2020 since the trucking company closures in 2019 doubled all the closures in 2018. Again, in Gilroy’s article, he mentions economist Noel Perry’s, prediction of a recession beginning in Q3 of 2020. Perry says, “The slowdown we have already seen, which is a fact in both manufacturing and trucking in 2019, is typical of the year before a recession.”

The start of 2020 looks rocky, but there’s hope on the horizon too. With Mexico’s approval on the U.S. –Mexico – Canada Agreement on trade, and 2 of the 3 countries on board, we wait for Canada’s approval to continue cross-border trade. Trade with our neighbors is a massive part of our economy and this agreement will certainly help the industry. The trade agreement with the U.S. and China also is in negotiations, which will be vital to the transportation/logistics industry.

As mentioned before, 2020 is an election year which brings far too much uncertainty to predict how everything will pan out in the industry. With the current turmoil between the U.S. and Iran, there is a lot that could happen in the first few months of 2020. For one, fuel costs will change in one way or another, and movement in the industry is already slower than it typically is this time of year.

The freight industry very much mirrors what is happening in our stock market and economy. The layers of uncertainty within our country will shift how the transportation industry continues throughout the rest of 2020. No matter the often-turbulent times of the industry, we will always stay moving, regardless of the ambiguous start to the year.

All the Best,

Jeff Beckham