Finding the Effects of Recession Hitting the Trucking Industry

All businesses will go through some ups and downs at one point of their time since this is what the nature of the market is. For even an ever flourishing industry, there has to be one point where it has faced some of the toughest time. So it is for the trucking industry currently. The year has been getting worse than ever both for the carriers as well as the independent operators. Although the earlier quarter of the year has proved to be good enough with the freight paying very well, things changed all of a sudden. Even the demands for the used and new trucks were much higher that what it was expected. Everyone was beefing up their entire fleet and the inventory with the expectation of the production season kicking in. but when it finally arrived, there was hardly any of its presence seen.

With the last quarter of the year running in, it has become clear for the entire industry, that there’s no coming back from the market this time. Some of the biggest trucking corporations have already faced a huge amount of losses with their stocks in the market dropping down drastically. Not just the carriers, but even the manufacturing companies and renowned truck makers do not have any idea regarding what to do with their loss.

According to Fred Barbara, trucking industry has been finding one noticeable trend for the last few years. Hundreds of owners and operators along with the small carriers have been trying to give an excuse why the freight has been so cheap. Studying the probable reasons, experts like Fred and much more have come up with some of the reasons which actually led to such a situation.

  • The fuel prices have dropped down to a pretty good number, and hence the freight pays less. The carriers have claimed that since the fuel prices have gone down, and the freight pays much less than before, they why the products that they carry do not cost less. The rates should be same, but the fuel surcharge should be less in order to bring this under control.
  • There have to be some brokers who have been taking the undue advantage of this situation. Well, there have been such brokers down the line, but since there has already been a tumultuous situation in the market, such activities of these brokers have come to the forefront, and are clearly noticeable.

While listing the problems, that according to Fred Barbara, trucking industry is facing is the huge amount of driver shortage which puts the risk of making this profession completely extinct some day. Since there’s too much of sitting idle and irregular payment due to this lack of demand, the drivers have actually started shifting to other places, and profession. Multiple carriers are going bankrupt, and along with it seals down the purchase of the trucks.

Hence, experts believe that sooner the situation is dealt with; the better it is for the industry. It is better to help the industry revive rather than crumbling down like a pack of cards.