Marketplace Update with Kevin Rutherford – 3 Part Series
In collaboration with Kevin Rutherford on the “Let’s Truck – Positive Matters” webinar platform, Convoy presents a three part blog series covering demand, supply, and rates in the 2020 freight marketplace.
For those of you who are unfamiliar, Convoy is a digital freight network operating in North America connecting carriers directly to shippers. Convoy’s sole mission is to help carriers earn more with less hassle in the industry. We accomplish this by pushing inefficiencies out of the market by automating the tedious back and forth that fleets deal with on a daily basis.
Introducing Our Hosts
Kevin Rutherford began his career as an owner operator 30 years ago. Over the years, his experience has evolved to be an expert in fleet operations, accounting, financial planning, driver recruiting, fuel efficiency, preventative maintenance, technical systems, and driver health. Today, Kevin hosts Trucking Business & Beyond on SiriusXM / Road Dog Trucking, and encourages healthy behaviors for drivers while they’re behind the wheel. During the 2020 coronavirus pandemic, he began a webinar series, Positive Matters, to focus on the health and mental wellbeing of drivers.
Aaron Terrazas is Convoy’s Director of Economic Research. Prior to joining Convoy, Aaron was an economist at the real estate platform, Zillow, and an economist at the United States Treasury Department. During the pandemic, Aaron has been crucial in providing economic insights for carriers, shippers, and Convoy during these unprecedented times.
Macey Knecht is Convoy’s Carrier Advocacy Marketing Specialist. Prior to joining Convoy’s marketing team, Macey worked on Convoy’s carrier-facing operation team for two years. On this team, Macey enabled carriers to find success with Convoy and brainstorm future opportunities for improvement in the freight marketplace.
An Overview of Demand, Supply, and Rates in the 2020 Freight Marketplace
Demand: The consensus outlook is focused on a gradual recovery, but recent data have come in stronger than expected — driven by strong consumer spending and extraordinary government support. This is in line with the reopening experience of other countries.
- Future waves of covid-19 infections are likely to have a smaller impact on total freight demand compared to the effect of the original stay-at-home orders in March.
- The U.S. economy is shifting from crisis management to restructuring: Businesses are operating below pre-crisis capacity and will be for some time. The income shock from high unemployment will modestly detract from consumer demand.
Supply: Bankruptcies are rising — particularly among small carriers. The new driver pipeline is particularly weak, and retirements are accelerating among older drivers.
Rates: Professional rate forecasts suggest flat rates through the end of the year with a wide range of timing for the cyclical rebound (anywhere from 2020 Q4 to 2021 Q2).