On a recent episode of Taking the Hire Road, guest host Leah Shaver, president and CEO of The National Transportation Institute, welcomed Avery Vise, vice president of trucking at FTR, for a conversation about the data behind trucking, the economy and the labor market.
Vise has long been tuned in to the data that showcases how the trucking industry is performing today — and where it may be headed tomorrow. In fact, he hosts FTR’s weekly Trucking Market Update podcast, where he explores some of those data points on a regular basis.
Looking at both general employment data and trucking-specific metrics, Vise stressed the importance of considering the most recent numbers in context.
On the whole, the U.S. unemployment rate has been under 4% for the past two years, which is historically very low. At the same time, new headlines announcing major layoffs seem to appear on a near-daily basis.
Frequent layoffs could be having a muted impact on the unemployment rate due, largely, to an influx of new job opportunities hitting the market at the same time. Still, Vise advised listeners to consider that even a low unemployment rate represents a large number of people.
A 4% unemployment rate means that over 6 million people in the U.S. are currently unemployed. Additionally, Vise pointed out that unemployment calculations are not based on the total working age population, but rather on the Bureau of Labor Statistics’ estimation of the amount of that population that consider themselves to be in the workforce to begin with. This means that the number of officially unemployed people and the number of working age people without jobs are different.
Several statistics come into play when assessing the state of employment in the trucking industry specifically. One of the ways to visualize hiring is via the number of Drug & Alcohol Clearinghouse preemployment queries being completed.
Queries have dropped somewhat, with December 2023 numbers coming in 5% lower than December 2022. Vise expects queries will remain somewhat suppressed throughout the year, indicating fewer drivers being screened for new jobs. It is important to note, however, that numbers from the past two years were elevated.
While the trucking industry has shed some capacity, the majority of that can be attributed to the small fleet closures. Overall fleet size in the larger companies has actually grown, according to Vise.
“We see a large number of primarily small carriers exiting the market, but the drivers displaced by that have, for the most part, found jobs elsewhere in the industry,” Vise said.
Recent trucking employment data shows a 1.5% drop from May 2023, according to Vise. Still, that is 4.6% ahead of February 2020 in terms of general freight truckload employment. This indicates that any decline in truckload employment is happening at a crawl, not a nosedive.
This will likely continue to reign true for at least several months.
“Active truck utilization is roughly 89%, which is below the 10-year average of 92%,” according to Vise. “We don’t expect utilization to get back to even the average until early next year.”
Vise did note, however, that certain factors — including the cooling of inflation and a reduction in interest rates — could influence consumers to spend more money, thus generating increased demand and shortening that timeline.
Ultimately, the current state of trucking falls in line with the age-old cyclical expectations that characterize the industry. Eventually, what goes around will indeed come back around.
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