It’s somewhat alarming to hear about one trucking company after another closing doors—especially after the record high year of freight rates in 2018.
What’s even more alarming is information we gleaned from the presentation Bob Costello, the Chief Economist from the American Trucking Associations, gave at the NASSTRAC Summit in June, where he noted: If there is any economic downturn shippers should see hundreds, if not thousands, of carriers go out of business.
Bob delivered an outstanding presentation that provided an overview of the economy, and discussed how these economic conditions are affecting carriers and shippers. On a sobering note, Bob talked about how trucking companies incurred higher costs (e.g. significant increases in driver pay) to keep their trucks moving and take advantage of the Boom Market in 2018. In 2019 they simply aren’t getting the rates they need to cover these costs. So he predicted that small to mid-size trucking companies could be under extreme pressure to survive. But as the closure of New England Motor Freight and Lakeville Motor Express confirmed, it’s not just small to mid-size trucking companies that are at risk.
If you’re a shipper you can request a copy of it here.
Is there a silver lining in the clouds for shippers?
Since rates are low, now is a great time to benchmark your rates and conduct a sourcing event to get a better understanding of your options for truckload and LTL shipping.
At the same time, with carriers going out of business, this could be a good opportunity to add an additional carrier of two to your mix and see how they work with your company.
If you need help conducting a sourcing event or with anything else, we encourage you to get in touch. We’re on your team, here to help, and passionate about seeing you be successful.
