The trucking industry took a dive in 2019, and 2020 is not projected to be much better, especially for smaller trucking companies. Even though the outlook for 2020 remains negative, it still might not be as bad as we have seen over the past two years.
In 2019, trucking companies failed at an alarming rate. Over 800 companies either went out of business or filed for bankruptcy, according to the website Transport Topics. Two of the larger companies that make up the 800 failed businesses include the Celadon Group and New England Motor Freight. According to Fox Business, “the company failures were the result of overcapacity in the market, thanks to the stellar year the industry had in 2018. When demand sagged, it drove prices down, making it challenging for weaker companies to continue operating.” Brian Fielkow, president of Jetco Delivery, believes that “much of the correction in the market has already happened but said supply will continue to be challenged.”
A trucking recession has been mentioned by many of the industry’s leaders and economists. Noel Perry, an economist with the firm Transport Futures 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. So, yes, I am specifically forecasting a recession beginning in the third quarter of 2020.”
There are many outlying factors that will impact 2020’s performance, including innovation and regulation. As policy shifts within the industry we expect it to be a slower year than the boom of 2018.