By Jeff Berman, Group News Editor · September 29, 2020
In a conversation I had with Mark Yeager, Redwood Logistics CEO and Senior Advisor with CI Capital Partners, during the “early days” of the COVID-19 pandemic, Yeager made a great point in regards to the state of the freight transportation market.
When I asked him what he thought some of the logistics lessons learned from the COVID-19 pandemic will be down the road, Yeager responded with the following: “I think we will look at this as a learning experience, especially if I am a shipper. Look at the last three years: there was high demand in 2018, low demand in 2019, and a crazy 2020. If you cannot learn from all three environments where supply chain strategy works and where it does not, you are missing a huge opportunity. We may never again see this kind of condensed microcosm of three different economies at three different times.”
That reply stuck with me, on a separate but related note, in that the snapshot of the last three years provided by Yeager can really act at a proxy for the trucking sector, too, as outlined in the annual “Freight Transportation Forecast: 2020 to 2031,” which was released this week by the American Trucking Associations (ATA) and conducted by IHS Markit. This publication is described by the ATA as an annual projection of the state of the freight economy. Yeager is spot on, noting how distinctly different each of the last three years has been.
ATA highlighted various key takeaways of this year’s edition of the Freight Transportation Forecast, including:
total freight volumes in 2020 are likely to collapse by 10.6% to 14.6 billion tons, although truck freight volumes falls a smaller 8.8%;
trucking volumes are expected to rebound in 2021, rising 4.9% next year and then growing 3.2% per year on average through 2026; and
overall freight revenues in 2020 will total $879 billion, rising to $1.435 trillion in 2031
To be sure, these figures, especially the first one, which focuses on total freight and trucking volumes, show the impact of COVID-19 on demand and production, with volumes, across many verticals, essentially falling off of a cliff, for a prolonged period before showing signs of a recovery. The good news, though, is that a subsequent rebound is expected. Here is to hoping that comes to fruition.
“The COVID-19 pandemic has had an unprecedented impact on many parts of the economy and trucking is no exception,” said ATA Chief Economist Bob Costello in a statement. “However, despite significant contractions in 2020, the forecast makes it clear that the long-term trend for trucking, as well as for the overall freight economy is positive.”
Costello also touted the myriad benefits of the publication, observing that it provides a roadmap for where the trucking industry, as well as all modes of freight transportation, are going, “which is why you can find it on the desks of industry executives and policymakers around the world,” he added.
What with all of the ongoing uncertainty, at the moment, whether it is on the volume, capacity, regulatory, or pricing front, among others, the timing of “Freight Transportation Forecast: 2020 to 2031” is good, as it helps industry stakeholders to put things into clear perspective and help map out strategic approaches going forward, too.
September 29, 2020