Zito: What the ‘Great Trucking Recession’ warns us about the economy | News, sports, jobs

Zito: What the ‘Great Trucking Recession’ warns us about the economy |  News, sports, jobs

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Salina Zito

JOHNSTON, Pa. — Two months ago, 30,000 Yellow Truck drivers lost their jobs when one of the nation’s oldest and largest trucking companies filed for Chapter 11 bankruptcy protection. Last week, Convoy, the digital freight broker that was supposed to… Reinventing the wheel and disrupting the trucking industry in a positive way, suddenly opened its doors.

These types of closures by two shipping companies reveal the uncertain state of trucking, an industry that is an indicator of consumer sentiment and also the beating heart of our economy.

“In my opinion, this industry is going in the wrong direction, and when trucking and the supply chain go in the wrong direction, so is the country. I’m not sure people understand,” said Rick McQuaid, who runs a shipping company in Cambria County, Pennsylvania, as well as in Florida. “There is a problem.”

“The damage started when people went on a spending spree during the coronavirus. The government was handing out money, and people started asking for things in a way they had never done before, McQuaid explained.

As a result, new trucks are on the road to meet consumer needs, McQuaid said.

Beginning last year, this need began to decline as the consumer spending spree began to subside, and as a result, many different things happened in the industry, starting with there being too many trucks compared to the amount of freight available.

This is hitting truck drivers and trucking companies hard, McQuaid said: “The economy is slowing down like crazy, and people aren’t buying anymore, which means there are more trucks on the road than there are loads, which is pushing prices down.”

McQuaid said his company’s prices are about 20% lower than last year.

“In other words, last year, we went from Pittsburgh to Allentown, maybe $1,200. This year, we’re lucky to get $900,” he said, adding: “You have more truckers fighting for the same loads that you have now, and that It leads to lower prices.”

McQuaid said truck drivers are earning less than they did at the peak of their per-mile earnings.

“Inflation plays a big role in that – and at the same time, operating costs are rising.”

The freight slump is real, says McQuaid, who also owns and operates a logistics company that has a chain of warehouses holding imports and exports.

“It’s not just in the trucking world. It’s also in the air freight and rail industries.

He said he was concerned that not enough people were thinking about the broader impacts of people not spending and truck drivers having nothing to move on.

“This recession is real,” he said frankly.

The trucking industry, or any form of transportation that moves goods, is the ultimate economic indicator of the direction the country is headed, McQuaid said.

“It provides very valuable insights into the health of the direction the economy is headed and into the consumer mindset: Are they spending, or are they feeling uncertain and moving inward?” he asked rhetorically.

September data released by the government contradicted McQuaid’s concerns, showing a rise in consumer spending of 0.4% to be exact. But economists, like McQuaid, have been cautious in their response.

Many families are spending their money unwisely, tapping shrinking savings accounts and pulling out credit cards, the Associated Press reported.

The data also shows that when people do spend, they’re rethinking spending money on big things, like dishwashers, shiny new stainless steel stoves, and refrigerators, which supports what McQuade is seeing on the shipping side.

“That’s what we’re seeing on the shipping side, and that’s not a good omen for the U.S. economy. This spending has kept us out of a recession,” he said. “Now that consumers are pulling back, we should pay more attention to what that means.”

Salina Zito is a political analyst for CNN and a correspondent and columnist for the Washington Examiner. It reaches every man and every woman through journalism, traveling from Main Street to Beltway and all places in between.

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