There may be a mounting driver shortage in the trucking industry, but that isn’t slowing demand for big rigs – signaling strength in the U.S. economy.
Orders reached 42,200 in June, up more than 18% month-over-month, according to ACT research, as reported by The Wall Street Journal. That figure is more than two times what it was at the same time last year.
Meanwhile, backlogs at factories are at the highest level in almost 20 years, at a time when orders typically slow down.
The demand for tractor-trailers is a sign of a strengthening U.S. economy. The more goods consumers purchase, the more trucks companies need.
“In my 23 years of financing over the road trucks, I have never seen demand this strong,” Matt Manero, founder & CEO of Commercial Fleet Financing, told FOX Business. "When people buy paper towels, roofs, or even cars at high levels, those goods are delivered on a truck. We are experiencing record highs in many industries, and therefore, the demand for trucks is at record highs."
In the May Cass Freight Index Report – which represents monthly levels of shipment activity – shipments by truck and rail climbed nearly 12%, as demand exceeded capacity in “most modes of transportation by a significant amount.”
“The 11.9% YoY increase in the May Cass Shipments Index is yet another data point confirming that the strength in the U.S. economy continues to accelerate,” the report read. “This level of percentage increase is usually only attained when emerging from a recession, not when comping against already strong statistics.”
However, the truck industry is struggling with a shortage of drivers, which has raised shipping prices. In the first quarter, Amazon reported shipping costs increased 38% year-over-year, while sales climbed 18%. Freight costs rose 20% at Coca-Cola as heightened demand outpaced available trucks, taking a slice out of revenue. Companies are faced with the dilemma of eating those costs or passing them on to the consumer.