The economy is on a tear and there is no end in sight. The result is a strain on trucking resources, including equipment and labor. There aren’t enough trucks and the shortage of truckers to drive them is making headlines like this one just days ago from “The Street,”
America’s Massive Truck Driver Shortage May Triple by 2026: Experts
The total amount of freight being shipped, the cost per load, and the number of new trucks being sold are all at record numbers. Demand Still Exceeds Capacity for All Trailer Types: DAT Barometers
Reason #1 -Trucking demand can’t keep up with economic growth – Current growth in the economy and in trucking has huge momentum. Almost all economists are currently predicting that this momentum alone will carry the economy through the end of 2019 and into 2020. Here are the conference board’s projections.
Reason #2 – We need more trucks in an ecommerce world – More product is being shipped rather than taken home in a car. Amazon is closing in on Apple to become the first Trillion Dollar enterprise. While the economy is growing at 2-4%, online sales last year grew by 15% and now represent 8% of all retail sales. As ecommerce sales increase, the demand for trucking increases.
Reason #3 – The US is producing way more oil and gas – The US is now the world largest energy producer and is exporting energy products. We are already #1 in oil and gas, but we will soon be #1 overall. Here are the numbers for oil and gas.
Obviously, the more oil and gas we produce, the more transportation is required. While much of this is pipeline and rail, there is still plenty of work for truckers. Under the current White House, no one expects oil and gas to go anywhere but up.
Reason #4 – Easier and faster to create Trucking capacity than rail capacity – Rail is near capacity and you can’t increase it overnight. According to JOC.com
Spot intermodal rates up 53 percent compared with last year
On average, domestic intermodal spot rates were up 53 percent year over year May 15. “Rail has capacity problems of its own,” Witten said. “It’s not tapped out, but it’s harder to get volume commitments. A lot of intermodal companies are at their limits.”
Reason #5 – The capital goods market may be ready to grow rapidly – The capital goods sector hasn’t caught up to the rest of the economy. With companies experiencing record sales and profits, it can only be a matter of time before they will invest more in capacity. The amount of trucking needed to haul equipment, building materials, and other capital goods may dramatically increase.
If you are currently in the trucking business, it might be the perfect time for your company to consider adding to the fleet. ACS Factors would love to help you finance your growth. We will provide you with cash for your freight bills the same day they are signed. Call today or fill out the application here. https://acsfactors.com/apps/Application_Form.pdf