U.S. Xpress Enterprises, Inc. (NYSE: USX) today released its economic forecast covering the first half of 2022, which highlights trends and updates specific to the logistics industry. The full, detailed forecast can be found on the company website. Four key themes emerged for the first half of 2022:
- Incremental growth in truckload capacity. The allure of an inflationary rate environment and robust freight volumes is hard to resist for entrepreneurial drivers who want to reap the benefits by running under their own operating authority. Recruiting efforts of midsize and larger fleets will continue to contend with drivers’ desire to become owner-operators or independent carriers. Asset-based carriers will have to rely more on their brokerage divisions to corral the trucks they need to serve their contract commitments.
- Tractor and trailer equipment backlogs. We continue to see record retail prices for used power units; with increases of nearly 68% year over year. Last year also saw a slew of new entrants into the carrier market despite record high equipment prices. A theory we’re exploring is that more experienced drivers are taking advantage of ballooning real estate values by using the equity in their homes to finance the purchase of used equipment. Additionally, the Biden administration expects the global semiconductor shortage to persist through at least the second half of this year, so the strain on equipment manufacturing might not be resolved anytime soon.
- Tightened consumer spending. Many government agencies have reported that inflation is at its highest in several decades, and increasing wage, materials and transportation costs are still working their way downstream from manufacturers and food suppliers to retailers and consumers. If inflation continues to creep into Americans’ daily purchasing decisions, it’ll erode their sense of confidence in the economy. However, flagging consumer demand could help resolve much of the strain currently being placed on supply chains.
- Legislative agendas in a midterm election year. Late 2021 ushered in an infrastructure bill that will have considerable impacts on the trucking industry. Construction projects will likely contend for workers who would have otherwise entered the driver pool. Ongoing supply chain challenges and workforce development programs will certainly be front-and-center for policy makers. A pared-back version of the “Build Back Better Act” could also re-emerge and there’s still uncertainty on how unemployment benefits will look in a post-pandemic economy.
U.S. Xpress Enterprises, Inc. is on a mission to make goods move better every day. Since its founding in 1985, the Company has evolved into a vital link in the supply chain, providing a portfolio of capacity solutions for its customers. This includes an established Dedicated fleet servicing some of the nation’s largest shippers, along with innovative over-the-road (OTR) and brokerage solutions. Variant, the Company’s driver-first OTR division, is the fastest-growing fleet in the industry. U.S. Xpress’ brokerage offering, Xpress Technologies, provides greater capacity for shippers, and for carriers, tools and resources to better manage and grow their business. Powered by more than 10,000 professionals, these businesses are driving innovation across the industry and helping to shape the future of logistics.
U.S. Xpress Enterprises, Inc.
Brad Carmony, VP, Brand Communications