In the growing marketplace of bad news, inflation is an especially hot commodity in the trucking industry. Wherever inflation is discussed in trends for carriers, it’s usually married up with prophecies of demise, fire, and the robot truck takeover.
But as headlines undercut the trucking world, it’s important to ask this crucial question: How bad is inflation in transportation really?
As a team of optimists, we typically see the bright side—but sometimes the bright side is just the truth.
After doing some digging, it turns out there are a number of promising trends for carriers that suggest we’re doing alright as an industry.
For example:
1. Fuel prices have dropped for the last four weeks.
Since its record peak of $5.810 on June 20, fuel has dropped nearly 38 cents, nearly a dime per week! This trend flies in the face of some early fuel price projections.
Industry experts attribute the drop to an increase in crude oil production by manufacturers.
This is great news.
As manufacturers continue to increase production capacity, the promise of cheaper fuel seems a likely trend for carriers.
2. The price of goods may be inflating, but sales volume is holding steady.
Don’t misunderstand us, an increase in the price of most goods is brutal for everyone.
But in an industry that’s more concerned with how much stuff there is to move, a recent report from FreightWaves shows consumers continue to buy:
“Overall retail is up 8.4% in terms of purchase volume, but the average transaction… was up only 1.2%, even though inflation is driving prices much higher.”
In addition to volume holding steady, freight availability continues to rise, even up 2.7% in June.
3. Trucks are selling like mad.
You might think record inflation would deter would-be owner-operators, but Volvo would disagree.
At the conclusion of Q2, Volvo reported a 51% increase in revenue from truck sales.
The demand is so high that Volvo has had to impose restrictions on buyers to keep up with production.
With so many aspiring drivers pining for a spot in the industry, it appears that their ambition to ride exceeds the additional entry costs of inflation. A telling trend for carriers.
Of course, inflation isn’t a positive for the industry. There’s plenty of material on that.
But just like the truckers that make up its force, the transportation sector is just awfully resilient.
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The England Carrier Services (ECS) division offers various services for carriers ranging from maintenance to support. As ECS members, carriers have access to nationwide discounts on fuel and tires from dedicated team members committed to finding the best price. ECS also provides factoring services with benefits such as same-day funding to a bank account or fuel card. These options allow carriers the freedom to focus on growing their business while saving time and money.