Driver shortage, supply chain volatility and economic uncertainty present lingering challenges
CHATTANOOGA, Tennessee, August 5, 2021– (COMMERCIAL THREAD) –US Xpress Enterprises, Inc. (NYSE: USX) today released its economic forecast for the third quarter of 2021, highlighting various trends and updates specific to the trucking industry. Full and detailed forecasts are available on the corporate blog. Three key themes to which we pay particular attention in the second semester are:
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Driver shortage will continue to impact truck loading capacity –
Additional stimulus checks and unemployment benefits continue to keep drivers off the road. Even though various state governments have canceled pandemic unemployment benefits, there are still more than nine million workers with pandemic benefit claims. With so much work on the sidelines, we’re unlikely to see any quick relief from the driver shortage. The carriers have introduced new benefits and incentives, but according to the US trucking associations, the size of the fleets of large and small carriers is still shrinking. Additionally, many corporate drivers choose to operate under their own authority, which does not necessarily increase capacity, but results in reduced utilization and deeper fragmentation of the industry.
Persistent challenges in the supply chain and uncertainty regarding consumption trends and economic growth –
Throughout the pandemic, we have seen how chaos and uncertainty can impact the supply chain. The disruptions impacted capacity, which impacts fleet productivity, which in turn exacerbates the overall volatility of the supply chain. Retailers’ inventories are still well below normal for this time of year, and government research indicates stocks are dwindling in the face of labor and material shortages. As more restaurants and in-person activities open, consumer spending could shift back to services and experiences, even as the leisure and hospitality sectors struggle to fill jobs.
Bidding season will see contract rates hike due to inflationary spot market activity –
We expect freight demand to remain strong given the broader economic recovery combined with continued favorable winds due to the federal government stimulus package which had a notable impact on our operations in the first half of this year. On the supply side, the market for professional drivers remains difficult, which contributes to limiting the supply. These conditions should continue to support spot market rates above contract rates and a strengthening contract renewal environment until the end of 2021.
“These factors will continue to have a significant impact on carriers and shippers over the coming months, but as vaccination rates increase and the economy continues to reopen, we hope to have a positive impact on the supply chain. ‘supply, “said Eric Fuller, President and CEO, US Xpress Enterprises, Inc.” Throughout the pandemic, our real heroes have been the truck drivers, warehouse and retail workers , logistics and supply chain managers, and a host of other frontline workers who have survived.
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.
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Brad Carmony, Vice President, Brand Communications