Trucking Industry: A Canary In The Coal Mine?

The trucking industry has been suffering. And it doesn’t appear that the outlook for 2020 is any more optimistic.

Driverless Trucks

Bru-nO / Pixabay

While many of us may not consider the importance of the trucking industry in our own lives, the health of this pivotal industry has a wide-reaching impact on a number of other critical businesses. Furthermore, there is evidence that the trucking industry may be a canary in the coal mine for the economy at large. In other words, we should all be paying attention to the health of the trucking business. Let’s take a deeper dive into the current status of the industry, the projected outlook for 2020, and the impact this will have on the economy at large.

Where Things Stand

The trucking business experienced a boom in 2017 and 2018. Much of the growth the industry experienced in 2018, which held two of the best quarters of revenue in the history of trucking, was attributed to tax cuts that were put into place in 2017. Unfortunately, this period of growth and profitability did not last. High tariffs and looming trade wars had a major impact on the trucking industry in 2019. According to Broughton Capital, by September 30th of 2019, 795 trucking companies were forced to shut down. This is a substantial number considering only 310 trucking companies shut down throughout the entire year of 2018.

Projected Outlook For 2020

While 2019 was a very tough year for the trucking industry, it doesn’t appear that the outlook for 2020 is any more promising. Industry analyst Kenny Vieth says, “The evidence overwhelmingly suggests 2020 is going to be a very, very tough year.”

Vieth isn’t alone in his prediction for a tough 2020. Rob Misheloff, the president of Smarter Finance USA, an equipment leasing and financing company for small businesses, says he doesn’t expect the trucking industry to recover from 2019’s setbacks any time soon. He cites the White House’s current tariff policy as the major issue for the struggling trucking businesses. Referring to his clients who are seeking help with their trucking companies Misheloff says: “It’s out of their hands.” As a result Misheloff struggles to offer any helpful advice. “There’s nothing they can do and there’s no magic bullet. Shipping’s down, and that’s partially because of the trade war,” he says.

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