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The losses come despite the fact that the U.S. economy added a shocking 2.5 million positions in May amid the effects of the ongoing coronavirus pandemic. Economists had been expecting a substantial decline in jobs – and an uptick in the unemployment rate to nearly 20 percent. Instead, the unemployment rate fell to 13.3 percent from 14.7 percent in April.
May’s losses in the truck transportation sector pale in comparison to April when 88,300 positions were cut. That was the largest monthly job loss since 2010 and erased gains that had been accumulating since November 2014.
Brian Fielkow, president of multimillion-dollar trucking and logistics company Jetco Delivery, told FOX Business that the continued job losses in May are not completely unexpected.
“You’d expect trucking to lag,” Fielkow said. “I think the restart is going to manifest itself over a period of time and regionally.”
As the economy adds back millions of jobs, truckers will be responsible for getting materials to manufacturers as they ramp up production, Fielkow explained, which plays out before freight demand begins to jump.
Fielkow said he thinks the market bottomed out between April and mid-May, and he is seeing a lot more optimism among clients compared to one month ago.
As previously reported by FOX Business, shipping rates had been causing pain in the industry – creating an environment where it was becoming unprofitable to run a truck in some instances.
Those pressures, on top of the pandemic-related financial stresses, increased the likelihood that smaller companies with less of a financial cushion would fail – on the heels of a particularly brutal 2019 when nearly 800 companies closed.
More company failures could lead to broader challenges as the economy begins to rebound because capacity in the industry could be contracting as demand bounces back.
Fielkow is also predicting the possibility of a driver shortage that could be worse than what the industry saw in 2018.