End of Pandemic Predicted to Bring Gains To Trucking Industry

“So much depends on the vaccine and how fast it is distributed to the general population,” said Bob Costello, Chief Economist for American Trucking Associations, regarding how the industry will fare in the new year. “I think freight will remain decent in 2021. On the good side, the vaccine will help return to ‘normal,’ which means sectors that are currently hurting–like services and manufacturing–can bounce back, leading to more freight.”

After the country’s heavy reliance on truck drivers throughout 2020 in the midst of the coronavirus pandemic, the industry as a whole is planning for a strong beginning in 2021 and expects fleets supporting the medical industry, final-mile delivery fleets, and homebuilding sectors to see steady gains throughout the year, especially those helping to transport COVID-19 vaccines.

Trucking and logistics companies participating in efforts to efficiently transport vaccines include some of the industry’s largest and most influential, such as UPS Inc., FedEx Corp., and DHL Supply Chain. Also helping with these efforts are smaller carriers like Boyle Transportation, which also works as a subcontractor for UPS specifically for distributing vaccines.

“There have been heroic efforts by the drug developers, the clinical trial participants, and the regulators to get this far, but the execution will rely in large part on blue-collar transportation and logistics professionals,” said Boyle Transportation’s president, Andrew Boyle.

The United States-Mexico-Canada Agreement was also ratified in 2020 as the North American countries’ borders remained open to essential trucking traffic, even before the virus’ real effect on overall trade was fully understood. Throughout the pandemic, North American trade with Europe, Asia, and elsewhere has remained strong.

Within the United States, a surge of pay boosts in the latter half of the year was offered to truckers while their carriers dealt with high demands in volume and difficulties regarding capacity. The industry expects these pay increases to continue during the new year, as well.

“All indicators from drivers show that pay and compensation programs are their priority,” explained vice president of marketing and training at Conversion Interactive Agency, Priscilla Peters. “Drivers are not only interested in seeing improvements in their base or per-mile pay, they are also looking for carriers who are increasing ancillary pay for detention, tarp pay, fuel incentives, and more.”

Peters also noted that not only will these compensation program boosts continue on steadily, but that more and more fleets will see themselves competing for drivers in a market that is quickly becoming much tighter.

“We do expect this trend to continue well into [2021],” DHL transportation solutions senior director of carrier development, Tim Podvin, agreed. “Particularly if business levels continue to be as strong as projected in the transportation sector.”

Many carriers have been facing obstacles finding and retaining drivers to meet the industry demand increase, especially as the country partially reopened, Podvin noted. He also explained that driver shortage and compensation increases have become common and recurring discussions among many fleets.

“In the current hiring market, increasing driver pay is usually the most effective way for companies to attract new drivers,” said Professional Driver Agency director of operations, Scott Dismuke. “As more people raise pay, it will force others to do the same to remain competitive.”

Luckily, trucking rate boosts will make raising driver compensation much easier, Dismuke said, although he believes the changing economy will make or break the continuation of this trend.

“I do not expect it to continue past midyear 2021,” said Noel Perry, economist for Transport Futures, “[because it will be a] weaker market for freight.”

Additionally, trucking analysts say that truck sales, which saw an upward trend toward the tail end of 2020, will remain strong into 2021 thanks to freight volumes staying steady throughout the pandemic and the delivery needs that came with it.

“We like to say, ‘fleets buy trucks when they make money,’” said Kenny Vieth, Research President for ACT. “With carrier profitability surging into the end of 2020–and heading to record levels in 2021–demand for medium-duty and heavy-duty tractors and retailers has responded in kind with equipment orders surging since September.”