State of the State 2024: Freight recession might not end until later this year, 2025

by Jeff Della Rosa (JDellaRosa@nwabj.com)

Editor’s note: The State of the State series provides reports twice a year on Arkansas’ key economic sectors. The series publishes stories to begin a year and stories in July/August to provide a broad mid-year update on the state’s economy. Link here for the State of the State page and previous stories.

Executives in the trucking/transportation and logistics industry look forward to a freight volume recovery, but it might be modest and slow, coming in the back half of the year or 2025. The market softness has pressured an industry challenged to cover rising costs.

Shannon Newton, president of the Arkansas Trucking Association, said the economic challenges and uncertainty carriers faced in 2023 eclipsed issues, like shaping regulatory and legislative policy and public image. Carriers focused on remaining in business and maintaining their customers and employees.

State of the State 2024: Freight recession might not end until later this year, 2025

Trucking industry report shows challenges linger in third quarter

The truck freight market continued to decline in the third quarter as carriers exited the industry, according to a new freight report. For the third consecutive quarter, U.S. freight shipments and spending decreased quarterly and year-over-year.

The third-quarter U.S. Bank Freight Payment Index report shows the truck freight economy continues to face several headwinds, including consumer spending on experiences over goods, a softer housing market and declining factory output. The U.S. Bank National Shipments Index fell by 9.7% in the quarter from the same period in 2022. It was the sixth-consecutive and the largest year-over-year decline since the 12.5% drop in the second quarter of 2022 at the start of the COVID-19 pandemic. The U.S. Bank National Spend Index fell by 12.5% in the third quarter from the same period in 2022.

Compared to the second quarter, third-quarter shipments and spending fell by 3.4% and 4.2%, respectively. Both shipments and spending have declined for five consecutive quarters.

Trucking industry report shows challenges linger in third quarter

State of the State Mid-Year 2023: Transportation industry manages soft demand, uncertainty

by Jeff Della Rosa (JDellaRosa@nwabj.com)

The trucking/transportation and logistics industry faces uncertainty in freight demand, including when it will begin to recover.

Shannon Newton, president of the Arkansas Trucking Association, has seen multiple economic cycles in her past two decades in the industry and offered an optimistic outlook. She’s hopeful the past includes the worst of inflation and consumers right-sizing spending. Still, she doesn’t expect a robust recovery.

“We’re going to toddler-walk out of it…in the way we’ve kind of walked into it,” she said. “We’re upright. We’re just a little unsteady in our steps. The industry as a whole has fared – [in] what is certainly economic uncertainty – fairly well,” added Newton, noting inexplicable demand and high costs. “Most of the members I’m talking with are weathering the uncertainty and trying to find ways…to maintain their talent, watch their costs, and wait until the economy becomes more stable and inflation subsides.”

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-transportation-industry-manages-soft-demand-uncertainty/

Trucking industry leader discusses economy, workforce challenges

by Roby Brock (roby@talkbusiness.net)

The president of the Arkansas Trucking Association, Shannon Newton, has seen plenty of ebbs and flows in her career leading and working in the transportation industry.

Economists and trucking executives are calling current industry conditions a “freight recession” which is causing a cyclical adjustment for companies throughout the nation’s supply chain.

“It’s very much like a recession-recession,” Newton said of a freight recession. “I think we’ve defined it kind of as a contraction in the demand over some sort of measurable period. The industry numbers indicate a contraction demand two months in a row. What you see is essentially the freight economy leading the anticipated recession that hasn’t really come.”

https://talkbusiness.net/2023/06/trucking-industry-leader-discusses-economy-workforce-challenges/

Trucking industry report shows driver labor issues have eased slightly

by Jeff Della Rosa (JDellaRosa@nwabj.com)

Challenges the trucking industry has faced to recruit and retain truck drivers have moderated following double-digit pay increases in 2021. Still, officials said the industry is short nearly 78,000 truck drivers, and this cannot be resolved by only addressing a single issue, including pay.

According to a Tuesday (Oct. 25) report from American Trucking Associations (ATA), the driver shortage has declined from a record high of 81,258 drivers in 2021. In 2018, the shortage was 61,000 and declined in 2019 before the COVID-19 pandemic when freight demand softened.

For a PDF of the report, click here.

https://talkbusiness.net/2022/10/trucking-industry-report-shows-driver-labor-issues-have-eased-slightly/

Trucking groups applaud White House plan to address industry labor issues

by Jeff Della Rosa (JDellaRosa@nwabj.com)

Trucking industry groups support a new White House program addressing the ongoing workforce challenges in the industry that have worsened amid the COVID-19 pandemic, according to a Thursday (Dec. 16) news release.

The Biden-Harris Administration announced Thursday a Trucking Action Plan that includes four strategies to strengthen the industry workforce. The program comprises a 90-day apprenticeship program for employers, accelerates the issuance of commercial driver licenses (CDLs), identifies states with CDL roadblocks, and focuses on recruiting, training and retaining drivers from underrepresented communities.

“We are encouraged that the Biden Administration has not only recognized the importance of adding new and well-trained Americans to the trucking workforce but has announced a path forward with what we believe will become a robust training opportunity for future commercial truck drivers,” said Bill Sullivan, executive vice president of advocacy for trade group American Trucking Associations (ATA).

https://talkbusiness.net/2021/12/trucking-groups-applaud-white-house-plan-to-address-industry-labor-issues/

Truck driver shortage key part of supply chain problem

by Paul Holmes (paulh@talkbusiness.net)

It is never more evident than during the Christmas season that Americans want what they want when they want it, often without any notion of how it gets there.

Now, however, U.S. consumers are more conscious than ever of the complex system of organizations, activities, people and information called the “supply chain” that takes goods from raw materials to finished products delivered to the user.

It is estimated that Americans will spend more than $1.3 billion during the Christmas season, but they may not get what they want when they want it. Shannon Newton, president of the Arkansas Trucking Association, said, “This time, we should expect some empty shelves” as the result of kinks in the supply chain.

https://talkbusiness.net/2021/12/truck-driver-shortage-key-part-of-supply-chain-problem/

No Timeline on I-40 Bridge Repair Completion; Lane Changes Save Truckers More Than $1 Million Per Day

by George Jared (gjared@talkbusiness.net)

Officials still are unsure when repairs to the Interstate 40 bridge will be complete, and it will not be reopened to even partial traffic until finished. Tennessee Department of Transportation Community Relations Officer Nicole Lawrence told Talk Business & Politics there have been no significant issues in repairing the fractured beam that closed the bridge in early May.

When the I-40 bridge, the busiest freight carrying bridge in the U.S., was shut down May 11 after a fracture was discovered in a primary support beam, the flow of goods came to a standstill. Traffic was choked on I-55 in the weeks after the closure and it led to long wait times for motorists and big trucks carrying goods.

The trucking industry has absorbed over $70 million in unanticipated costs since the closure, according to the Arkansas Trucking Association. However, the latest data on traffic congestion suggests that the average cost to the trucking industry has reduced from an estimated $2.4 million to $936,000 a day.

https://talkbusiness.net/2021/06/no-timeline-on-i-40-bridge-repair-completion-lane-changes-save-truckers-more-than-1-million-per-day/

(photo courtesy of ArDOT)