CHATTANOOGA, Tennessee – (COMMERCIAL THREAD) –US Xpress Enterprises, Inc. (NYSE: USX) today released its economic forecast for 2021, highlighting various trends and updates specific to the trucking industry. Full and detailed forecasts are available on the corporate blog. Four key ideas include:
- Fewer drivers and more stimulus funds will continue to reduce truck loading capacity – The reduction in CDL training and the Drug & Alcohol Clearinghouse has resulted in a reduction of nearly 200,000 drivers as of the start of 2021. Additional government stimulus dollars could prevent even more from starting or returning to a career as a driver. the trucking industry. This will likely lead to reduced capacity and increased wages for drivers.
- Freight activity remains dynamic, but economic growth is cooling off – While Wall Street is optimistic about an economic recovery in 2021, the ongoing pandemic and slow vaccination efforts will temper growth for the first half of the year. Replenishing inventory will remain a priority for shippers for the months to come. Additionally, record holiday shopping will lead to higher yields early in the first quarter and more households will continue to use online platforms for key purchases as physical retail remains closed. As coronavirus cases slow down, we expect a steady recovery in the second half of the year.
- Increase in public spending – Now that Democrats control the presidency and both houses of Congress, 2021 will usher in a whole new list of policy prescriptions that could have far-reaching implications for the trucking industry. Additional unemployment assistance and stimulus dollars will boost consumption (and bolster freight volumes) while preventing drivers from re-entering the workforce. A proposal to increase mandatory insurance minimums for carriers could bankrupt many small players. What’s more, the new administration is planning a bold infrastructure program that will spur many construction projects across the country, potentially prompting drivers to leave the workforce for jobs closer to home. These factors could have long-term ramifications for demand through 2022 and beyond.
- Increase in contractual and spot rates – The combination of fewer drivers, increased freight demand and reduced capacity will cause contract rates to increase by 8-15% in 2021. Spot rates will likely tend to increase through the months of fall, where they will subside before increasing again as we enter the peak holiday season.
âThe coronavirus pandemic continues to impact our industry in ways we could not have imagined a year ago, and these challenges will reverberate throughout 2021,â said Eric Fuller, president and CEO of US Xpress. âI am proud of our men and women who have been on the front lines, delivering essential goods throughout this pandemic. It will continue to be a difficult year, but I have no doubts that it will end on a positive note.
US Xpress Enterprises, Inc.
Through its subsidiaries, US Xpress Enterprises, Inc. (NYSE: USX) provides roaming, dedicated and brokerage services to its customers. Founded in 1985, the company uses a combination of smart technologies, a modern fleet of tractors, and a network of highly skilled professional drivers to efficiently move freight for a wide variety of customers. US Xpress implements a range of digital initiatives and technologies to drive industry innovation, streamline the value chain for customers, and improve the overall driver experience. To learn more, visit usxpress.com.