Chevin Fleet
TRUCKING MARKET
FEARS 'GREAT
PURGE' DUE TO
SOARING INFLATION
As inflation continues to soar and rates spiral even lower, trucking companies
across the nation are beginning to experience what is called the “Great Purge.”
The economy has been in a tailspin since the pandemic began. The trucking
industry and its 2 million truck drivers have not been immune to its effects.
The industry is in the midst of a years-long driver shortage, which the COVID-19
pandemic has only exacerbated. As a result, many trucking companies are
struggling to find enough qualified drivers to meet the demands of their
customers.
Trucking companies nationwide are being forced to confront the possibility of
letting go of a substantial number of their drivers and making other difficult
decisions to stay afloat.
Rising global oil prices also affect the industry’s current predicament. Crude oil
prices have more than doubled since last year, and trucking companies are feeling
the pinch at the pump.
Similarities with the 2019 Freight Market Crash
There are several parallels between the current market conditions and those of
the freight market crash of 2019, with some saying the industry is inching closer
and closer to an even deeper rock bottom.
During that time, rates also plummeted, and there was a widespread driver
shortage. It led to hundreds of trucking companies going bankrupt, with the
majority of them caused by the inability to cover the cost of maintaining their
businesses amidst deflating rates.
However, the main difference is that the current market conditions are primarily
driven by inflation rather than a decrease in demand, as was the case in 2019.
Small Truckers Are Getting Pushed Out of Business
The current market conditions are proving difficult for small trucking companies.
Many of these businesses are forced to decide whether to raise rates or get out of
the business altogether.
Some trucking companies choose to do both, but even that may not be enough to
keep them afloat. With the cost of doing business continuin