Trucking industry on fast track to recovery after driver turnover plummeted amid
After the profound impact of COVID-19 on the driver market earlier this year, the trucking industry is making bounds towards recovering faster than the rest of the economy.
During the second quarter, the annual turnover rate of truck carriers fell by double-digit percentage points. The impact of this, due to the enduring pandemic, could be felt across the industry at large and small carriers alike.
In the second quarter, the turnover rate at truckload carriers with more than $30 million in annual revenue declined by 12 percentage points to 82%, the lowest level since the end of 2018. The rate at smaller truckload carriers declined by 10 percentage points to 60%, the lowest level since the fourth quarter of 2011.
The annualized turnover rate at less-than-truckload carriers was unchanged at 12% during the second quarter.
“The second quarter was a tumultuous one for trucking, and the broader economy, as restrictions imposed to slow the spread of the COVID-19 had significant impacts on the country,” said American Trucking Associations Chief Economist, Bob Costello, in a press release. “The coronavirus had a profound impact on the driver market – particularly in the first part of the second quarter. But by the end of the quarter, we had begun to see the market tighten again as various restrictions began to be lifted.”
“After steep drops early, the driver market began to normalize toward the end of the quarter,” Costello said. “As the economy continues to recover, we should see the market for drivers continue to tighten going forward.”
According to ACT Research’s recently released Transportation Digest, the U.S economy is recovering from the pandemic in a ‘K-shaped’ pattern. The freight economy is experiencing a ‘V-shaped’ recovery pattern, as opposed to other segments that are experiencing an ‘L-shaped’ pattern.
“Over-the-road carriers are enjoying a period of volume growth and pricing power that would have been considered shocking, though welcomed, from an April 2020 vantage point.” said Kenny Vieth, ACT’s President and Senior Analyst., “The underpinnings for this strength include the lighter impact of COVID-19 on goods-producing sectors, which are truck intensive, as compared to the devastation still being felt by services sectors, which are not trucking intensive. In addition, the consumer spending substitution away from experiences and toward goods, pent-up demand for inventory restocking, a hot housing market, low interest rates and low energy prices are supporting freight.”
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