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Driver shortage, supply chain volatility, and economic uncertainty present sustained challenges
CHATTANOOGA, Tenn., August 05, 2021--(BUSINESS WIRE)--U.S. Xpress Enterprises, Inc. (NYSE: USX) today released its Q3 2021 economic forecast, highlighting a variety of trends and updates specific to the trucking industry. The full, detailed forecast can be found on the company blog. Three key themes that we are paying particular attention to in the second half of the year are:
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Driver scarcity will continue to impact truckload capacity -
Additional stimulus checks and unemployment benefits continue to keep drivers off the road. Even as various state governments have rescinded pandemic unemployment benefits, there are still more than nine million workers with continuing pandemic claims. With that much labor sitting on the sidelines, we’re unlikely to see any quick relief for the driver shortage. Carriers have introduced new perks and incentives, yet according to the American Trucking Associations, fleet sizes for large and small carriers remain down. Additionally, many company drivers are electing to run under their own authority, not necessarily increasing capacity, but resulting in reduced utilization and deeper fragmentation of the industry.
Continuing challenges in the supply chain and uncertainty about consumption trends and economic growth -
Throughout the pandemic, we’ve seen how chaos and uncertainly can impact the supply chain. Disruptions have impacted capacity, which impacts fleet productivity, which in turn exacerbates overall supply chain volatility. Retail inventories are still well below normal for this time of the year, and government research indicates inventory drawdowns in the face of labor and materials 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.
RFP season will see increased contract rates due to inflationary spot market activity -
We expect freight demand to remain strong given the broader economic recovery combined with the continued tailwinds because of the Federal Government’s 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 challenging which is helping to keep a lid on supply. These conditions are expected to continue to support spot market rates in excess of contract rates and a strengthening contract renewal environment through the remainder of 2021.
"These factors will continue to significantly impact carriers and shippers alike for the months to come, but as vaccination rates increase and the economy continues to re-open, we’re hopeful for a positive impact to the supply chain," said Eric Fuller, President & CEO, U.S. Xpress Enterprises, Inc. "Throughout the pandemic, our true heroes have been the truck drivers, warehouse and retail workers, logistics and supply chain managers, and a host of other front-line workers who have sustained lives."
U.S. Xpress Enterprises, Inc.
Through its subsidiaries, U.S. Xpress Enterprises, Inc. (NYSE: USX) offers customers over-the-road, dedicated, and brokerage services. Founded in 1985, the Company utilizes a combination of smart technology, a modern fleet of tractors, and a network of highly trained, professional drivers to efficiently move freight for a wide variety of customers. U.S. Xpress implements a range of digital initiatives and technology to drive innovation in the industry, streamline the value chain for customers, and improve the overall driver experience. For more, visit usxpress.com.
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Brad Carmony, VP, Brand Communications