Biden’s Economy Is Killing the Trucking Industry
Commentary
During the pandemic, freight prices skyrocketed, as did consumer demand, attracting thousands of new companies into the trucking industry. Now, a general economic downturn is dampening consumer demand while the cost of operations is higher. This is forcing carriers out of business.
Experts believe we are heading into a trucking market crash caused by overcapacity, inflation, higher gas prices, higher cost for used trucks, and lower consumer demand. In 2021, a near-record number of new trucking companies of 109,340 opened for business. That was 50,202 more new trucking companies than in 2020.
The demand for trucking companies is closely linked to the volume of containers arriving at U.S. ports. Using data from the Port of Los Angeles as an example, when COVID-19 lockdowns started in February 2020, container volume had declined 22.87 percent compared to 2019, and in March, it was down 30.94. “The truckers were doing very little at that time,” explained Erik Larson from Sage Live, a freight broker and logistics expert with over 20 years in the industry. Many drivers and carriers were out of business or simply could not afford to drive because the price of shipping was below the cost of operating the trucks….