They Are Calling This A “Bloodbath” For The $800 Billion Trucking Industry As U.S. Economic Activity Dramatically Declines

They Are Calling This A “Bloodbath” For The $800 Billion Trucking Industry As U.S. Economic Activity Dramatically Declines by Michael Snyder for The Economic Collapse Blog

The U.S. trucking industry has not experienced a downturn of this magnitude since the last financial crisis, and this is one of the clearest signs yet that the U.S. economy is steamrolling into a severe economic downturn.  When economic activity is increasing, the trucking industry sees rising demand for their services and freight rates tend to go up.  That is precisely what we witnessed in 2018, and truckers were hoping for more of the same in 2019.  But when economic activity is on the decline, the trucking industry sees decreasing demand for their services and freight rates tend to go down.  Unfortunately, the numbers that the U.S. trucking industry is reporting right now are absolutely abysmal.  Freight rates have now fallen for six months in a row on a year-over-year basis, and according to Business Insider during the month of May loads on the spot market fell “by a chilling 62.6%” compared to last year…

This year has been rocky for the $800 billion trucking industry.

After a raucous 2018, 2019 has seen retailers and manufacturers moving less, according to the Cass Freight Index. Freight rates have dipped year-over-year for six months straight. Loads on the spot market, in which retailers and manufacturers buy trucking capacity as they need it rather than through a contract, have fallen by a chilling 62.6% in May year-over-year.

The spot market is where we see the marginal changes in demand most clearly, and what this is telling us is that we are already in a transportation recession.

Of course that is almost certainly putting it too nicely.  According to one owner-operator, what we are witnessing right now is nothing short of a “bloodbath”

The earnings of big and small players alike are getting hit as factory activity continues to decline. The Lexington, Kentucky-based owner-operator Chad Boblett said some truck drivers are seeing a “bloodbath.”

There has been a spate of trucking companies declaring bankruptcy this year, too. The largest was New England Motor Freight, which was No. 19 in its trucking segment. Falcon Transport also shut down this year, abruptly laying off some 550 employees in April.

If demand does not start rebounding really soon, we are going to see many more trucking companies go bankrupt.

And of course it isn’t just trucking companies that are licking their wounds right now.  All modes of transportation are down compared to last year, and that is a clear indication that big trouble is ahead for the U.S. economy.  According to Wolf Richter, the Cass Freight Index just suffered it’s largest drop “since November 2009″…

Freight shipment volume in the US dropped 6.0% in May compared to May last year, the sixth month in a row of year-over-year declines, and the sharpest year-over-year drop since November 2009, according to the Cass Freight Index for Shipments.

The index tracks shipments of goods for consumer and industrial sectors across all modes of transportation – truck, rail, air, and barge.

What a difference one year can make.

Last year at this time we were in the midst of a trucking boom, and as a result orders for heavy trucks surged to record highs

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Michael Snyder

I am a voice crying out for change in a society that generally seems content to stay asleep.  My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters.  (#CommissionsEarned)  By purchasing those books you help to support my work.  I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I can only allow this to happen if this “About the Author” section is included with each article.  In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.