When the COVID-19 pandemic hit in early 2020, the U.S. trucking industry — like many others in the supply chain management sector — encountered new and evolving challenges.
E-commerce skyrocketed as people relied heavily on online shopping. Carriers shipping essential consumer goods had to scale up rapidly to meet soaring demand, while many serving non-essential retail, manufacturing, or industrial sectors saw a sharp drop in business that they are still recovering from. 2020 was a turbulent and disruptive year for the industry, yet the outlook for 2021 is optimistic.
According to recent forecasting, carriers can expect to face some ongoing concerns, like rising fuel costs and labor shortages, but overall, they will continue to see increased freight demand and rebounding market conditions throughout 2021.
Positive Market Conditions
The Trucking Conditions Index (TCI), calculated by freight transportation consultancy FTR, tracks the changes of five important conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel price, and financing. Individual metrics are combined to create a single score that measures the temperature for the industry overall. A reading above zero is adequate, and a reading above 10 indicates positive conditions for carriers.
The most recently released TCI, from January 2021 by, was 10.37 — surpassing December 2020’s 8.51 and almost matching November 2020’s 10.46. FTR credited January’s high score to stronger freight rates and volumes, noting that the TCI is expected to remain in a strong range, though high fuel costs may have a negative impact on February’s TCI.
Truckload Volume Growth
Consumer demand remains strong, and experts predict that truckload volumes will grow in 2021. After weak numbers in the first half of 2020, freight volume was showing signs of recovery in the second half of the year.
The American Trucking Associations’ For-Hire Truck Tonnage Index, which measures demand and is largely based on contract truckload freight, was down 4% year over year from January to October 2020. The index rose 5.7% from August to September, then dropped 6.3% in October. Other research found that contract truckload volumes increased 3% in October year over year, and spot market volumes were around 120% higher.
With e-commerce as strong as ever and market conditions redounding, 2021 is expected to be a positive year for the trucking industry.
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