Last week, the Department of Labor released March’s employment numbers and they showed the trucking industry’s total employment losing 6,800 jobs. This marks the first month-to-month decrease since May 2013.
American Trucking Associations’ Chief Economist, Bob Costello, notes that the March trucking job drop of 6,800 was substantial, but makes sense as the economy as a whole also slowed with the addition of just 126,000 jobs in the month. He also notes this fits with other weak January & February economic data.
What Does This Mean for Capacity?
The effect this dip in employment will have on the trucking industry depends heavily on this year’s level of economic activity. Economists have mixed opinions about the projection of economic activity for the remainder of 2015.
Many predict solid growth and claim it will surge as the warmer weather returns and seasonal freight demand picks up. Costello predicts that “Due to growing freight volumes, regulatory pressures and normal attrition, we expect the problem (driver shortage) to get worse in the near term as the industry works to find solutions to the shortage.”
Other economists claim the economy will continue this slow growth citing slow gains in the Truck Tonnage Index year-over-year and now this prolonged drop in trucking employment. Slow growth and inconsistent economic activity might give some short-term relief from capacity issues, but it would not be a positive sign for the industry overall.
Odyssey will continue to monitor the state of the economy and the effect it has on the industry. We will keep you advised of any actions recommended for your business. In the meantime, if you have any questions or concerns, please feel free to call.