Dive Brief:
- With U.S. manufacturing growth headed downward, tariff increases looming and interest rates headed up, economists are forecasting that in 2019 trucking companies will start to feel an easing off the gas in terms of demand.
- DAT analysts predict in the first quarter, carriers can "expect load volumes to drop significantly due to tariffs and other factors."
- Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence, told Trucks.com that freight will grow at or above 3% for the first half of the year and decrease to 2% growth in the second half.
Dive Insight:
"We are past the peak" in the trucking industry, Noel Perry, principal at Transport Futures, declared at the Council of Supply Chain Management Professionals' (CSCMP) Edge 2018 conference in Nashville, Tennessee.
At the time, it was a new idea. Now three months later, all indications, including the often overlooked law of gravity, point to the trucking boom ending in 2019, according to economists and analysts.
2018 was a true boom year with records smashed month after month. New truck orders peaked in July. Shipments peaked in May and continue to show strong year-over-year growth.
Even as volumes declined slightly toward the end of the year, expenditures kept climbing, as demand continued to exceed supply. With capacity already stretched thin and shippers still largely focused on getting product into the U.S. to avoid additional tariffs likely coming down the pike, the trucking industry hasn't yet felt the effects of this kind of uncertainty — but it's about to.
"The economic forecasts are mixed overall, which adds to uncertainty in other freight-producing sectors," wrote DAT analyst Mark Montague in a research note.
Montague added that as the weather warms in the second quarter, large construction and infrastructure projects should resume, creating an uptick in shipments. If the record truck orders from 2018 are indeed fulfilled, supply may yet be much better matched with demand this year.
