Trucking jobs drop by thousands in August as industry battles challenges
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According to data from the Bureau of Labor Statistics, the industry lost 4,500 jobs between July and August. Nonfarm payrolls in the sector came out to a seasonally adjusted 1,516,700.
Overall, the U.S. economy added 130,000 jobs in August – which was below expectations.
As previously reported by FOX Business, trucking companies have been shuttering at a fast clip so far this year.
Donald Broughton, principal and managing partner of data firm Broughton Capital, told FOX Business that in the first half of 2019, 640 trucking companies failed. That means more than 20,000 trucks have been pulled from the road.
In 2018, 310 companies failed total.
As previously reported by FOX Business, the closures have left about 2,659 drivers without jobs.
“This has to do with the spot market,” American Trucking Associations chief economist Bob Costello told FOX Business. “Those fleets that are primarily in the spot market are facing volumes that are down nearly 50 percent and rates that are down nearly 20 percent.”
In July, the Cass Truckload Linehaul Index – which measures per-mile truckload rates – was essentially flat, after 27 months of year over year increases.
Trade tariffs, as well as slowdowns in a variety of markets – including the housing and auto markets – contributed to the drop, Broughton said.
“Coupled with the fact that these smaller fleets boosted driver pay last year in the fact of a severe driver shortage, it is easy to see how some of them are upside-down,” Costello added.
According to the American Trucking Associations, the industry might find itself short more than 100,000 drivers in five years – and 160,000 by 2028. Just to replace retiring drivers and keep up with economic growth, the group predicts the industry will need to hire an average of 110,000 workers per year.
Among the big companies that have failed in 2019 is New England Motor Freight, which employed more than 1,400 drivers. HVH Transportation, Falcon Transport and LME have all shuttered operations this year, too.
The contract freight market is also experiencing softness, Costello added, though not near what is occurring in the spot market.
Broughton previously told FOX Business that he expects pricing to remain a problem for the industry for another six to nine months – which means more companies are likely to fail and jobs may continue to be lost.