The U.S. economy has slowed due to the coronavirus pandemic and although many have accepted this reality within the past couple of weeks, the trucking industry saw this coming. The industry did not necessarily predict the outbreak of a deadly disease as the reason for a recession, but they did project some type of slowdown, nevertheless. How? Because trucking is the lead indicator of where the rest of the economy is headed as 71% of freight in the U.S. is moved on trucks.
Think about it. The trucking industry participates in all phases of manufacturing. If people are buying less, manufacturers are producing less, and therefore there is less of a need to move goods via freight. In turn if the industry sees a higher demand for truckers, it probably means that manufacturers are making more goods because people are buying more…all indications of economic growth. When the rest of the U.S. is growing or is headed towards a slowdown, the trucking industry experiences the effects first.
For example, the trucking industry went into a recession in the second quarter of 2006. What happened less than two years later? The Great Recession of 2008. This time around the trucking industry began to slow in late 2018 and early 2019. Specifically, in the first six months of 2019, 640 trucking companies went bankrupt. With this data, many who are in and pay attention to the industry predicted some type of economic slowdown. Experts in the industry say that the U.S. was already doomed for a recession but now with the coronavirus pandemic in full effect, the recession might be one that is tougher to recover from.
Because truckers play such a significant role in the U.S. economic, look at the trucking industry to predict where we might be headed.
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