Here's What the Trucking Industry Could Learn From Airlines
It was the best of times, it was the worst of times—for American trucking companies.
This year alone, nearly 800 U.S.-based trucking companies have gone bankrupt. That’s almost three times the rate as in 2018, when things were looking remarkably positive.
Only 310 carriers failed that year, resulting in about 2,800 trucks being taken out of service, a 20-year low. Demand was strong. Ground freight rates were rising. The group ended 2018 with $796.7 billion in revenues, up nearly 14 percent from the previous year, according to the American Trucking Associations (ATA).
Flush with cash, managements did what some other industries have been guilty of doing in boom years—they began to expand aggressively. Capacity growth exploded, and spending on drivers’ pay surged.
Among the things they didn’t anticipate in 2019 were escalating insurance costs and oversupply, which drove shipping rates down at the fastest pace since 2016. The U.S. trade war with China didn’t help either.