If you have been thinking of buying a transportation franchise in the U.S., take note that some experts believe that the trucking industry will continue to thrive until 2019. A strong economy and manufacturing activity serve as the reasons for the sustained growth. Some companies have even reported growing market and revenue, including Old Dominion Freight Line.
Economy and Manufacturing
Industry indices showed that manufacturing orders have increased as of August. The looming holiday season would only cause further growth as demand for consumer products means that retailers will need freight carriers’ service to distribute them across the country. In fact, truck orders have reached 52,400 units since August. Freight carriers are doing their best to reserve slots by next year, given the current shortage of drivers in the country. According to the American Trucking Associations (ATA), the turnover rate for large trucking companies rose to 98% between April and June.
ATA said in a report that the average rate for driver turnover in the industry reached 96%. Carriers with less than $30 million in revenue showed some slight improvement after recording a 1% decline in turnover to 72%. While carriers could expect the industry to perform well in 2019, the issue of recruiting new drivers will remain a persistent problem.
Some people may think that a high turnover reflects a lack of qualified drivers. On the contrary, it only means that there is a high demand for drivers, according to ATA Chief Economist Bob Costello.
The next few months could provide you with some time to consider how the logistics sector’s performance would fare by next year. Despite some setbacks, the business environment for trucking seems sustainable. Most consumer items still move by truck, so demand for the service will not be likely to decline anytime soon.