Trucking has, like other parts of the American economy, taken a punch from COVID. April’s job losses in the sector – estimated at 88,000 or 5.8% of the workforce per the Bureau of Labor Statistics (BLS) – were enough to eliminate all job gains in trucking since September 2014. Total separations in the larger BLS umbrella category of Transportation, Warehousing and Utilities in March and April topped 900,000. And while BLS reported net job gains of 8,100 in trucking for June, there’s still a lot of ground to regain for the industry. Short version – from February to July, total trucking employment was down about 6%.
There is good news, though, some hiding in plain sight on the calendar. As summer winds down, the pre-Christmas shipping season winds up. And as the retail rush begins, lower overall capacity means shippers have been able to boost rates. Spot dry rates have risen from around $1.35 in May to more than $2.00 in August. FTR’s Trucking Conditions Index spiked from a record low of -28.66 in April to a 11.35 in June, the highest reading in a decade. Better yet, net trailer orders in July were up 84% YOY, with 173,000 units ordered in the preceding 12 months. But the sector’s long-term issues remain – driver shortages, infrastructure, and trade friction among them. And hanging over everything is the uncertain direction of the American economy, driven by consumer sentiment, intertwined with an ongoing pandemic.
Will Fleets Still Move Forward with Clean Fuels?
In these uncertain conditions, will trucking fleets still move forward with plans for clean-fuel rollouts? We strongly suspect the answer is “yes”, for several reasons.
For starters – fuel prices. Diesel costs and driver pay have duked it out for pole position as trucking’s single biggest cost for years and recent data shows more of the same. Diesel prices rang in the new year at about $3.08, nationally averaged. EIA data shows that as the pandemic grew, prices slumped to around $2.39 during the first week of May, and crept higher as June began. These are low prices – retail diesel was about a buck higher as recently as fall 2018.