Right now, economists, workers, and consumers alike are all holding their breath with the looming potential of a recession. It’s a lot to mentally wrangle with while we all look at various economic indicators and hope for the best.
One major indicator of the US economy, though, is trucking, a key factor in supply chains, and new data implies that trucking shortages may be coming to an end.
A big link in supply chains
When production and demand rise, so does the demand for trucks to transport goods. There has been a significant upward trend in individual truckers negotiating individual transactions per load, also known as the spot freight market. Data from Truckstop.com shows that there was a dramatic increase in spot freight market rates around the February 2020 COVID-19 shutdowns. That rate just kept climbing until January of 2022, when prices started to decline.
This is an early indication that the two-year-long trucking crisis is almost over. Driver shortages too are going down, and shippers will no longer have to aggressively compete to get their goods delivered.
An economic ripple effect
This also means a reduction in the supply chain bottlenecks, like in the Port of Los Angeles. In January 2021, 103 cargo ships were waiting to be unloaded in the Port of Los Angeles, and by May of 2022, that number dropped to 39. There was also a 20 percent increase in the availability of shipping containers, and most of this is attributed to the increased availability of trucks and recent improvements in efficiency at the Port of Los Angeles.
Whether or not there will be a recession still depends on other factors such as lockdowns in China, United States and China trade tensions, the war in Ukraine, and companies making their supply chains more resilient, despite the higher costs. Trucking, however, looks to be doing well, and with demand remaining strong it is reason enough to remain economically hopeful.
