Posted On November 5, 2019
According to recent studies conducted by the American Transportation Research Institute, driver shortages will continue to be a major concern heading into 2020. Additional research from the American Trucking Associations show carriers across the country face a combined shortage of up to 50,000 drivers.
While shortages remain high on the list of concerns, rates have leveled off over the past several months. As of November, national van rate averages have decreased by three cents per mile and reefer freight rates are down by five cents during the same period. While there is no guarantee rates will continue to decrease (or even remain static), shippers have at least caught a temporary respite from perpetual increases.
That said, driver shortage and rates aren’t the only important trends affecting shippers.
Here are three more:
Consumer spending continues to drive a hot economy.
For months, media outlets across the country have focused on the potential for a recession. While no one can fully predict how the economy will (or won’t) behave, the once-expected downturn in 2020 does not appear likely.
Though year-over-year economic growth has slowed in 2019, personal consumption (aka consumer spending) saw its biggest increase since 2017.
Some smaller carriers continue to struggle.
Some small and mid-size carriers have struggled to compete in a tougher, more competitive market. Carriers in Colorado, Alabama, Indiana, Georgia, and several other states have either been acquired or closed altogether, leaving shippers with (depending on their market) fewer choices.
Like any industry, fewer choices and less competition could eventually place pressure on rates.
Supply chains will remain a hot political topic.
Like 2016, trade is expected to play a significant role in the upcoming presidential election. Research from the Institute of Supply Management shows that factory activity in the United States recently weakened, leading some economists to speculate that ongoing trade tension with China played a role in slowing growth.
Like predictions about the economy, predictions about politics and trade policy should be made with caution.
That said, it is not a stretch to argue that trade policy and its impact on supply chains will remain on the radar of business leaders throughout the next year.
What do these trends tell shipping managers and logistics executives?
Collectively, economic trends, carrier consolidation, and trade politics mean managing a supply chain in 2020 will be just as challenging as it was in 2019.
Thankfully, shipping managers and supply chain leaders do not have to navigate the challenges of 2020 alone.
The Flat World family of companies, including Flat World Supply Chain, Ram International, Ram Custom Crating, Flat World Hospitality, and Prologue Technology, are here to help your shipping department navigate both the positive and negative trucking trends coming in 2020. Our team of transportation experts will help make 2020 the year you build the supply chain that takes your business to the next level.
Each fall, experts and researchers identify trends and changes that could impact shippers in the year ahead.
And every year the Flat World family of companies helps our clients navigate those changes.
In 2020, we look forward to partnering with your company, and making you part of the Flat World family.