A Year in Review: LTL Industry Trends for 2019
With a new year on the horizon, now is the perfect time to wax nostalgic over the one that we’re waving goodbye to in our rear view. 2019 was one for the (log) books, exemplifying truckloads of volatility and innovation in equal measure for LTL shippers, carriers, and the freight market as a whole.
So before we ride into the next year, Let’s take a look at what transpired in the trucking industry during this last year of the decade.
A Freight Recession
Overall, 2019 was less than kind to trucking companies. Tariffs and trade spats between the U.S. and its major trading partners (namely China and Mexico) coupled with an overcapacity of trucks on the roads caused carrier rates to sink and bankruptcies to rise, especially among small-fleet companies. The first six months of 2019 alone saw freight demand drop 39%—a harbinger of the U.S. economy’s overall health. As the arrival of Chinese goods to our shores dropped with escalating tariffs, fewer and fewer trucks were needed to transport said freight.
This can help explain why the trucking industry is so slow currently—even as tensions have showed signs of easing throughout the latter months of the year, there simply still aren’t as many truckloads to haul. And unfortunately, the slowdown doesn’t show signs of easing up in 2020.
A Drive in Driver Numbers
Truck drivers came away as the big winners of the decade’s penultimate year. Though a driver shortage has been consistent since 2005, according to the American Trucking Association, in 2018 that shortage spiked to a record-high 60,800 drivers, leaving carriers to scramble for new recruiting and retention strategies. But based on LTL industry trends in 2019, the publicity around the massive shortage, combined with companies’ recruiting efforts, heightened awareness about major opportunities and created at least 1,300 new driving jobs in the freight industry.
A few reasons for that drop in shortage numbers, according to the ATA: better pay, benefits, and perks. And the fact that a shortage still exists going into 2020 offers job security for those drivers already on the roads.
The (Re)Introduction of Driverless Trucks
While the new millennium is in reality a far cry from its depiction on The Jetsons, one prediction finally came true… sort of. 2019 saw the first autonomous freight vehicles hit the roads, with companies like Tesla and Daimler testing the new technology out in the real world prior to commercial roll-out. While schematics and prototypes for these vehicles came out as early as 2015, it was within the last year that autonomous technology companies brought them increasingly outside of their respective test tracks and onto U.S. roads. In September, Daimler began testing its trucks in Virginia, and drivers have periodically spotted Tesla’s trucks on California roads.
ELD Mandate Enforcement
In keeping with the technological trend, the trucking industry rounded out 2019 with the full-scale roll-out of the ELD standard in December. Since 2012, LTL carriers have slowly been adapting and integrating electronic logging devices (ELDs) into their shipping processes, replacing the standard paper logbooks that drivers have used to record their hauls. However, some trucking companies had previously installed automatic on-board recording devices (AOBRDs) prior to the Congressional bill that set ELD requirements in place. Up through the last year, these AOBRDs have been grandfathered in as acceptable… until now.
December 16th saw the official end to those grandfathered devices, and many trucking companies spent the last few months of 2019 replacing their hardware and changing their processes to fit the FMCSA-enforced procedures. The new year is likely to bring a few hiccups as LTL carriers work to get online with their new logging systems.
A Carrier Cooldown
This drop in demand led to over 600 trucking companies shuttering their businesses within the first six months of 2019. Carriers without strong, established relationships with shippers saw a drastic drop in the prices they could charge for both contract rates and spot rates, eating well in their bottom lines.
Though 2020 shows signs of an upswing in rates (which is excellent news for beleaguered LTL carriers), it’s still beneficial for shippers and carriers alike to consider ways to build fruitful and reliable partnerships to weather any unpredictable storms. A proven way to do so is by utilizing an experienced freight broker who’s done the legwork for you—like Flock Freight!
When you join the Flock Network, you benefit from access to established freight companies that we’ve vetted and built trusted relationships with. Shippers receive negotiated PTL, TL, and LTL shipping rates typically reserved only for larger companies, and carriers grow your business by consistently keeping trucks full and driving routes you prefer.