b'28American Journal ofTransportation ajot.comTransportation market volatilityLABOR DAY 2024impacts carriers, shippers and driversThefreightrecessionhastakenitstollonthetruckingindustry.With volumesdownandtruckingandtrucking-relatedcompaniesgoingout of business, so are the industrys employment opportunities. But there is a qualitative shortage for drivers that shrinks the available labor pool. Begging the question of what will happen with the next surge in demand? By Debra Phillips, AJOTThe trucking industry hasthat the market is bottomingeverythingincludingfast had its share of challenges inout,withtheexpectationfood.Thestudyfoundthat 2024.Inflation,geopoliticalthattheupperhandwill46%ofconsumersbelieve unrest,andhigheroperatingeventually return in favor ofthat high prices have reduced costshaveledtorecordthe carriers. theirstandardofliving. numbers of trucking companiesTherearemanyreasonsConsumersarealsoaware andfreightbrokeragesgoingforlessdemandforfreight,that a slowdown in inflation outofbusinessinthepastbut the primary one has beendoesnotnecessarilymean twoyears.Accordingtoacombinationofinflationlower prices.industry sources, 400 truckingandasignificantdropinMany industry stakeholders companies closed their doors inconsumerspending.Asofarewonderingwhenthe 2018, 400 in 2019, and 3,000 inJune 2024, a study conductedfreightrecessionwillend, 2020. Current figures continueby the University of Michiganwith some experts predicting to increase dramatically. foundthatconsumersarethat the trucking industry will One of the factors that setfrustratedbytheimpact(VOLATILITYcontinued on the stage for these significantofhighpricesforvirtuallypage 30)changes was COVID. During thefirstwaveoftheglobal pandemic, trucks, drivers, and certain items were in demand. Therewereevenfinancial incentivesforcompaniesto enter the market at that time. The Economic Injury Disaster Loans (EIDL) from the Small Business Association(SBA) was one option that allowed newplayerstoenterthe freight market and supported companies. Truckingcanbe anexpensivebusinesswith thecostofnewequipment, facilities,andfuel.Margins can be razor-thin at companies of all sizes.t heF reIghtr ecessIonandj oBsWhen the incentives went awayanddemanddecreased, many smaller companies could no longer operate, said Page Siplon, Chief Executive Officer of OneTeamLogistics.Thetruckingindustryis nowexperiencingafreight recession,withtoomuch capacity and too little freight tomove.Aspokesperson fortheAmericanTrucking Association(ATA)said, Volumesaredown,rates aredown,andoperating costs are up making it a very challengingenvironmentfor U.S.truckingcompanies. Capacity has been slower to leave than anticipated, which has added pressure on fleets.Partofthedynamic regardingcapacityhasbeen companieslikeSAIAand Estes Express buying trucking facilities that once belonged to Yellow at a time when the trucking industry as a whole hasnotrecoveredfromthe currentrecession.Bydoing so, the companies are adding capacity back into an industry thatalreadyhastoomuch capacitytobalancedemand for services.Withcarrierslackingthe needed leveragein the form ofincreaseddemand,pricing power, and tighter capacitytheres an emerging consensus'