- The trucking industry has been in a recession in 2019.
- Small trucking companies and owner-operators (truck drivers who work for themselves) have been hit hardest.
- After an uptick of 700 trucking payrolls in October, the industry slashed another 1,000 jobs in November, according to the monthly jobs report released by the federal government.
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The trucking industry slashed 1,000 payrolls in November, according to the most recent jobs report released by the Bureau of Labor Statistics.
The job cuts come at a time when the trucking industry should be ramping up for the holiday season. Warehousing and storage, for example, added 8,000 jobs last month. And in November 2018, some 4,100 trucking jobs were added.
ACT Research said America’s $800 billion trucking market has been in a recession since early 2019. Freight volumes have declined for 11 straight months. Manufacturing, which tracks the trucking industry, has contracted for four straight months.
In the first half of the year, about 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the number of bankruptcies from the same period last year – about 175.
Here’s the number of jobs added or removed in 2019:
- January: 19,100 trucking payrolls added; 1,516,000 total
- February: 100 added; 1,516,100 total
- March: 1,200 removed; 1,514,900 total
- April: 2,300 added; 1,517,200 total
- May: 1,800 added; 1,519,000 total
- June: 1,900 added; 1,520,900 total
- July: 300 removed; 1,520,600 total
- August: 5,100 removed; 1,515,500 total
- September: 2,900 removed; 1,512,600 total
- October: 700 added; 1,513,300 total
- November: 1,000 removed; 1,512,300 total
A red flag for the rest of the economy
Everyone from the C-suite to individual truckers are increasingly blaming their woes on an industrial recession – one that’s being kicked off by President Donald Trump’s trade war.
“We have been in an industrial recession for the last year, and I say that just based on the objective fact that not only us, but the entire LTL industry has seen negative tonnage growth in each of the last four quarters,” XPO CEO Brad Jacobs said in a call to analysts on October 29.
Another explanation for 2019’s challenges is the cyclical nature of the trucking industry – big upticks are typically followed by downturns. And 2018 was a remarkable year for trucking, with rates across the board hitting nearly record highs.
Because of that high pay, trucking companies bought huge numbers of trucks and hired new drivers in anticipation of profits to come. But then, as the supply of trucks and truckers caught up to demand, rates fell, making that investment challenging to pay off.
When the rest of America is headed for a downturn, freight usually dips first, a report from Convoy’s economic-research division said. The industry went into a recession in April 2006, more than a year before the rest of the economy was clobbered by the Great Recession, starting in January 2008.
A tumble in trucking doesn’t always foretell a recession for everyone else. The freight industry goes into recession twice as often as the rest of the economy, according to Convoy.
Regardless, the jobs report reflected an unexpected boost
But the ongoing hit to trucking hasn’t seemed to cause the rest of the economy to meaningfully contract. The rest of the jobs report crushed expectations, translating to a 50-year low in the unemployment rate, at 3.5%.
That unexpected boost in payrolls surprised analysts, who have said for months that the economy is slowing down. This year, the US has added an average of 180,000 jobs a month, down from an average monthly gain of 223,000 in 2018.
Still, a windfall of jobs isn’t necessarily a win for many Americans. A Brookings report recently found that 44% of US workers are in low-wage jobs, earning a median annual salary of $18,000, despite historically low unemployment.
Are you a truck driver who has struggled in 2019? Email the reporter at email@example.com.