Recession in the Trucking Industry
The COVID-19 pandemic has contributed to a significant decline in the employment situation in the trucking industry. The industry observed a slight decline in May this year; however, it is still a tad better than the end of last year (1).
Trucking employment observed a drop of 1,500 jobs after an increase of 600 jobs in April. The employment data for the month of April and May are preliminary.
In 2020, the trucking subsector faced 42,500 job loss. Compared to the largest annual decrease in 2009, when the trucking company lost over 100,000 trucking jobs, this number is far better.
Job employment in the industry again fell by 76,500 jobs during the Great Recession in 2008. Another recession year occurred in 2001 when we lost over 49,000 jobs
The trucking industry is up less than 1,000 jobs when compared to the end of 2020. Around mid-2020, there was a drop of over 92,000 jobs as the trucking subsector endured its largest monthly loss ever since the subsector tracking began in 1990.
The pandemic and subsequent lockdown restrictions, including stay-at-home orders, had a massive impact on business operations, with April 2020 being the hardest hit month.
It caused several businesses to shut down and modify operations, causing massive job losses and erasing over 5 years of employment growth in the industry. However, things began picking up from May 2020, which was the beginning of a nine-month positive streak.
Some Reason for Hope
The employment report submitted by Convoy, an online freight network, shows some improvement in the trucking industry, despite the ongoing concern about labor shortages (2).
Convoy focuses on three data points in its analysis that show the labor market in a positive light.
- This year April saw the average work hours rise after hitting an all-time high in March.
- Young and Hispanic drivers were the most responsive to the job positions that recently opened up in the trucking industry, as per the household survey data.
- There was a keen interest in online CDL training, but this interest was not backed up as states ended their emergency Unemployment Insurance benefits.
According to Aaron Terrazas, Convoy’s director of economic research, June will provide better insight into the efforts of onboarding drivers and policymakers’ support to the economy.
It is yet to be seen how the COVID-19 era policies and broader reopening will impact the latest labor market ideas whether it will yield job gains or fail to shape up as intended.
According to the US Bureau of Labor Statistics, material-moving and transportation jobs showed a slight increase to 8.9% from 8.8% in April (3). This shows a huge improvement from last year's data when the employment rate in the transport industry was greater than 18% as a result of the pandemic.
The economy gained 55,000 jobs in May, with the employment rate dropping to 5.8% from 6.1%. However, there was a drop of 9% in employment since April 2020.
Final Thoughts
The pandemic has surely caused some setbacks in the economy and trucking industry. However, this is not the first time the industry has faced such unprecedented turmoil. Now is the time to stay at the top of your game more than ever and prepare for any expected downturn.
Assuming another wave of unemployment won’t hit us as strongly as last year, the rest of this year could play out much better.
While panicking won’t help, it is smart to stay tax compliant by filing form 2290 using e-file service providers such as eform2290.com. You could also double-check on your processes, protect cash flow, and implement better techniques and supply chains for greater efficiency.