As you prepare for the New Year, it’s important to take a close look at the trucking industry outlook for next year. Areas including freight rates, shipping capacities, and truck orders indicate a booming and in-demand industry. Take stock of where your trucking company can expect growth in 2019 and where you need to adapt for the year ahead.
Is it possible that truck sales will start to decline in 2019? According to Trucking Info, the industry is expected to struggle due to trade wars and tariffs pending the NAFTA resolution. Fuller and Bayaan add that by January 1, 2019, new tariffs will be implemented on Chinese goods. This will cause prices to increase on a wide range of goods shipped into the US. As a result, shipping may slow down to account for the price increase.
If this happens, truck sales along with freight orders will be on the decline. Keep in mind this is solely based on whether there are trade wars in the common year. Furthermore, FTR reports that Class 8 truck and trailer sales are up for 2019. This is in direct correlation to the freight demand that has had the trucking industry booming over the past couple of years.
Globalized Shipping Concerns
Another unique proposition that the Journal of Commerce points out is the trucking industry is expected to struggle due to ocean cargo. The issue is that ocean cargo is in the midst of a perfect storm due to new lows during the previous peak shipping season. As a result, shippers may not see their freight on land at all, much less in the trailers of truck drivers. This concern with ocean shipping is expected to carry on through 2019.
Explosion in the E-Commerce Sector
Fuller and Bayaan point out another interesting shipping fact for the 2018 holiday shopping season. For the first time ever, the e-commerce marketplace has exceeded the sales of brick-and-mortar retail businesses for Black Friday. At a total value of more than $8 billion, online shipping has created an even more pressing demand among the less-than-truckload market. LTL shipping and parcel delivery will continue to grow in demand as the e-commerce industry continues to excel with no signs of slowing down.
Trucking Rates Continue to Climb
Shippers can expect trucking rates to continue going north, however, at a slower pace than we’ve since this year, ranging from a 7-10% increase for truckload contract rates and 1-5% increase for spot quotes, according to FTR.
A Few More Things to Consider
While trucking rates continue to climb, USI reminds those that higher rates do not mean greater profit for truckers. The increased pricing is a result of higher costs carriers are facing which include rising insurance costs, driver pay, maintenance, and equipment just to name a few. As these items continue to go north, carriers are still fighting to turn a profit.
As we quickly approach 2019 and the uncertainly that comes with it, there is one thing that you can rely on…Road Scholar Transport will continue to provide our customers with the high level of service they expect and deserve. Contact us today to discuss your transportation needs and how we can fulfill them.