The trucking industry is one of the top indicators of economic activity. New data suggests that the lack of available truck drivers is nearing an end, which is great for the supply chain.
Initially, spot freight market rates experienced a significant increase following the Covid-19 shutdown in February 2020, as the upcycle peaked in January 2022. Prices are now beginning to decline even during the spring season, which usually experiences an increase in prices.
Is the Two-Year Trucking Crisis Finally Over?
The decrease in spot freight market rates indicates that the truck driver shortage in the United States is nearing an end. Shippers also don't have to aggressively compete in the spot market for moving shipments. While contract freight prices continue to increase, they typically lag behind freight prices by nearly six months.
Other Signs of Improvements in the Supply Chain
The number of cargo ships waiting to be unloaded in ports also continues to drop. For example, 103 cargo ships were at the Port of Los Angeles in January waiting to be unloaded, but this number decreased to only 39 in early May.
Additionally, the average cost of shipping a container fell by more than 20% from September 2021 to March 2022. These numbers indicate a bigger increase in available container capacity.
Will the Economy Return to Normal?
The truck driver shortage may be nearing its end, but questions still loom over the economy. No one knows if the economy will eventually return back to normal soon or if it's the beginning of a recession.
Many other factors will influence the economy, whether it's different challenges in the global supply chain, trade tensions with China, and the war in Ukraine. Companies will need to continue to find ways to increase resiliency in the supply chain to stay ahead of these challenges.
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Topics: Shippers, Carriers/Truckers, Shipping News
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