The Conservative Cave
Current Events => Economics => Topic started by: Ptarmigan on April 26, 2022, 06:52:02 PM
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'It basically just dropped off a cliff': Analysts fear major trucking downturn spells doom for US economy
https://www.theblaze.com/news/trucking-downturn-foreshadows-recession
The U.S. trucking industry has suffered a dramatic downturn in recent months and financial analysts are worried the bad news is a presage of widespread economic trouble.
What are the details?
According to data compiled by Reuters, the demand for trucking every kind of product from food to furniture has been in a free fall since March. And one segment of the industry that deals with on-demand trucking, known as the "spot market," has been hit especially hard.
"It basically just dropped off a cliff," said Craig Fuller, the CEO of transportation data company FreightWaves, in conversation with the news agency.
The demand-sensitive spot market is now in correction territory, Reuters reported. Average first-quarter spot rates, excluding fuel, plummeted 55 cents per mile from $2.78 in mid-January to $2.23 on April 14. A slight downtick is reportedly common for that time of year, but the industry normally only sees a 22 cent per mile decrease.
Trucking has been in a downfall. It could signal a serious recession.
Analysts fear the downward trend could soon "decimate truckers' ability to dictate prices and push some small trucking firms into bankruptcy," the outlet stated. But not only that, it could foreshadow a wider recession across all sectors of the U.S. economy.
Trucking data company Convoy found that economic recessions followed six of the 12 trucking recessions since 1972. The reason is simple: When consumers buy less, companies ship less, causing trucking activity to slow.
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Based on the truck traffic I see in and around Little Rock, there hasn't been much of a decline. The interchange at I-30 and I-40 is especially bad, and has been that way ever since I've been in this area. :shrug: