Trucking companies are coming out of the pandemic-caused recession with some of the highest profit and revenue totals on record.
Motor carriers from Arcbest to XPO all have posted record results in the quarter. U.S. Xpress’ second quarter didn’t have the same gains as the company invests heavily in shifting tonnage to its Variant trucking brand and load optimization platform. But in its quarterly trucking industry forecast, U.S. Xpress said the outlook for the third quarter is good thanks to many of the same trends that powered the second quarter.
“We expect freight demand to remain strong given the broader economic recovery combined with the continued tailwinds because of the Federal Government’s stimulus package which had a notable impact on our operations in the first half of this year,” the company said.
Still, the industry continues to face significant labor issues. A benefit is that pushes rates higher.
“The market for professional drivers remains challenging which is helping to keep a lid on supply. These conditions are expected to continue to support spot market rates in excess of contract rates and a strengthening contract renewal environment through the remainder of 2021,” the motor carrier said.
Motor carriers are having a hard time moving the labor wheel.
“Carriers have introduced new perks and incentives, yet according to the American Trucking Associations, fleet sizes for large and small carriers remain down. Additionally, many company drivers are electing to run under their own authority, not necessarily increasing capacity, but resulting in reduced utilization and deeper fragmentation of the industry,” the company said.
And supply chains and many parts of the economy remain chaotic.
“Disruptions have impacted capacity, which impacts fleet productivity, which in turn exacerbates overall supply chain volatility. Retail inventories are still well below normal for this time of the year, and government research indicates inventory drawdowns in the face of labor and materials shortages. As more restaurants and in-person activities open, consumer spending could shift back to services and experiences, even as the leisure and hospitality sectors struggle to fill jobs,” U.S. Xpress said.
What does it all mean?
“These factors will continue to significantly impact carriers and shippers alike for the months to come, but as vaccination rates increase and the economy continues to re-open, we’re hopeful for a positive impact to the supply chain,” said Eric Fuller, chief executive of U.S. Xpress Enterprises, Inc. “Throughout the pandemic, our true heroes have been the truck drivers, warehouse and retail workers, logistics and supply chain managers, and a host of other front-line workers who have sustained lives.”