The year 2020 was a revelation of sorts for everybody working in the trucking industry in the US. According to the US Bureau of Labor Statistics, it was only slightly different than in 2023. Surprising, isn't it? Several US for-hire trucking companies retained a far lower number of employees in the previous year for many reasons. The data that sprouted in December 2023 expresses the likelihood of increased layoffs and a reduction in overall capacity by the start of 2024. The demand for freight is low, however, the impact of this development is not going to be much visible in the pricing.
If we compare the numbers of 2024 beginning with those of May 2022, it is quite surprising that the overall number of trucking jobs has reduced significantly. The period of contraction in freight demand has continued into this year and according to a report by BLS, the total number of non-seasonally adjusted jobs in the industry was 1,588,400 for December.
We all know that LTL provider Yellow, which employed nearly 30,000 workers, witnessed a collapse on 30th July. Ever since there has been a steady decline in the number of truck transportation jobs in the industry. This includes workers at truckload, specialized and household goods carriers, and LTL as well.
The loss of 31,000 jobs in August from a sudden gain of 31,300 jobs starting from January and going till July 2023 was a big shock for the for-hire trucking sector.
Till November end, the sector did add around 4,100 odd jobs but several trucking companies dropped nearly 4,500 jobs in December.
After the collapse of Yellow, the employment trend in the industry kind of flattened out. The year 2023 could not match up to the 5.1% increase in 2022 and a 5.3% increase in 2021.
And yes, Yellow employees have not been hired again, at least not in the trucking sector.
Is This Job Loss Typical? Understanding The Trends
There is usually a trend of job reduction in December and January. If we look at the last decade, the average non-adjusted monthly job loss has been 23,580 for January. According to studies, the worst trend has been in 2017 when 31,800 jobs were lost. January 2022 is considered the last boom cycle of the trucking industry when the job loss was only 14,300.
This denotes a reset of 22 months only for trucking employment. It takes us back to April/May 2022. The effect would be considered much more significant if trucking demand was stronger given the current job loss. Do you know that in November alone, the Cass Freight Shipments Index was down by 1.3%? If we look at the annual trend, it is low by 8.9% on an adjusted basis. Looking at the Monthly Index Reading, you can say that freight volume was at its lowest since August 2020.
This looks like a positive trend because it suggests that shippers all across the country still have abundant truck capacity and this is despite the decline in jobs. However, it is still a matter of concern, especially for shippers that are planning ahead, expecting that there will be an increase in freight demand in the future. This can be anywhere down the line such as in the spring of 2024 or perhaps in the beginning of 2025.
The Journal of Commerce for-hire trucking employment index came down to 104.2 from 104.4 in November. This was the result of a drop in unadjusted trucking payroll numbers in December.
“On the truckload side, the market may not have yet bottomed out,” says Mike Regan, CRO (Chief Relationship Officer) at TranzAct. “The LTL side of the business is acting differently. They have a level of pricing discipline that is different than in truckload.”
This brings this index back to the position that it held in August and September. The historic peak that was recorded and had everybody in the trucking industry dancing was 106.3 in July.
But we can still conclude that employment in the trucking sector is still 4.2% higher than what it was in 2018, especially in its fourth quarter. This is considered the base period for this index and a very strong period of trucking growth as well. Seasonally adjusted trucking employment has increased by 3,300 jobs in December. This indicates that hiring efforts have paid off well. The Bureau of Labor Statistics expects more growth in the future.
Source: This article is based on information sourced from Journal of Commerce. For more in-depth insights, you can refer to the original article: https://www.joc.com/article/us-trucking-workforce-edge-seasonal-cliff-after-job-losses_20240105.html
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