Neil Stayner has been a truck driver since 2001. But now that trucking rates have dipped significantly, he’s out.
“My business is finished, because the cost of freight has dropped to an all-time low,” Stayner told Business Insider. “It’s sad what I sacrificed every day, every week, every holiday — gone from my family.”
Trucking has been in a recession since the first half of 2019, according to ACT Research. That fact doesn’t surprise truck drivers, dozens of whom have told Business Insider that their earnings have slashed this year.
While freight volumes have ticked up in July and August, indicators that a recession is still gripping America’s $800 billion trucking market. The federal government’s monthly job report said on October 4 that trucking companies slashed 4,200 payrolls. Manufacturing, which tracks the trucking industry, cut 4,000 jobs.
The job report was otherwise mixed, and transportation as a whole added 15,700 jobs.
The September report also clarified that 5,100 trucking payrolls were slashed in August, up from 4,500 previously reported from preliminary numbers.
In the first half of 2019, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the amount of bankruptcies from the same period last year — 175.
The recession in trucking has especially affected small carriers, who operate largely on the spot market. Trucking loads can either be picked up on demand through the spot market, or through a pre-arranged contract. The contract market comprises the vast majority of the trucking market, according to the American Trucking Associations.
Spot market rates have crashed in 2019, while contract market rates haven’t seen the same dip.
According to the most recent Chainanalytics-Cowen Freight Indices report, dry van spot rates are down 16.1% from the same period in 2018. Contract rates in dry van are down 8.1%.
Still, major companies along with small business owners like Stayner are getting hit by the trucking downturn.
Cold Carriers, a refrigerated trucking company with more than 400 truck drivers, filed for bankruptcy last week; it will continue operations as it restructures its debt obligations. And industry leaders like J.B. Hunt, Knight-Swift, and Schneider all had to slash their annual outlooks this year.