For the first time in nearly two years, the average cost of moving goods by truck is set to rise 0.2% annually this month, signaling a potential end to the trucking recession, according to Bloomberg. Trucking executives are optimistic, noting demand is returning to pre-pandemic levels. Knight-Swift Transportation Holdings Inc. CEO Adam Miller expects demand to build at the end of the third quarter and see seasonal activity in the fourth quarter. The Russell 3000 Trucking Index, including major companies like JB Hunt Transport Services Inc. and Old Dominion Freight Line Inc., rose 9% this month, reversing an 8% drop from the first half of the year. Retailers are working through excess inventory and placing advance orders to avoid delays due to port backlogs and strikes. This has contributed to an increase in freight demand.
Despite the positive outlook, challenges remain. Manufacturing activity is still low, consumers are struggling and there is an oversupply of trucks. The industry is in the early stages of recovery, with profits not expected to return to pandemic-era highs.
As many as 14% more truck drivers are on the road compared to March 2020, while freight volumes have only increased by 4%. Retailers are also favoring rail transport due to its lower cost.
