Trucking industry expected to remain on upswing through 2021

The white paper reports that the nation’s GDP likely fell 30% to 50% in the second quarter. However, both shipments and freight spend reportedly fell less than U.S. GDP overall as the economic decline affected service businesses the most.

In fact, tender rejections averaged 7.47% in Q2, 258 basis points (bps) higher than the previous year. The white paper also reports that contract volumes and spot rates averaged 6.8% and 2.8% higher year-over-year in the second quarter, respectively.

FreightWaves believes that conditions favor positive load volumes in the second half of 2020 (flat up to 5%) on a year-over-year basis and moderate upward pressure on spot and contract rates. Carriers are also projected to fare extremely well as the capacity (supply) side is expected to present a lower vulnerability to downside risk than typically experienced in a freight recession. This is due to the industry’s 18-month cleansing of supply.

Risk factors are still a concern, however. Back-to-school (BTS) season is in full swing — an estimated $100 billion event, according to the National Retail Federation. If schools nationwide go fully virtual, this could have major economic and freight ramifications as FreightWaves estimates that BTS spending represents 7%+ of overall retail spending in the third quarter. November’s presidential election may also shift initial forecasts as a Democrat victory may bring about rollbacks on Trump’s tax cuts, which could have a major effect on the stock market and economy as a whole.