2020 has been a year for the history books, and a year that we’ll most likely remember for the rest of our lives. It’s seen a global pandemic, a record number of hurricanes along the Gulf Coast, wildfires, widespread rioting and looting, and a polarizing presidential race. Our country has been in turmoil, and the transportation industry has felt the effects of that turmoil as well. I’m sure you’ve heard people say things like, “when is this year going to be over” and “I can’t wait until 2021 gets here”. The optimists in all of us want to believe that things will get better. We’ve all started to look for the light at the end of the tunnel, but what exactly will 2021 look like?
There’s no question that we have been fighting the problem of driver shortages for years, and the large asset-based carriers are doing their part to attract more drivers by offering higher wages. What does that mean for freight rates in 2021? At least in the short term, that means that freight rates will remain high. Asset-based carriers feel confident that they will be receiving higher rates throughout 2021 so that confidence allows them to pass more of that on to their drivers. The long-term question is will the pay increases actually attract new drivers into the industry, or will it only serve to retain current drivers? If the pay increases do in fact attract enough new drivers then the long-term effect could be a normalization in the supply and demand equation, and that normalization will in turn eventually bring freight rates back down.
For now, we have to roll with the punches and realize that Jan 1, 2021, won't magically bring about solutions for all the turmoil that we’ve had to endure this year. Even though that’s not the news that we want to hear, 2020 has taught us to be stronger and more resilient than we ever thought we could be. So we will enter into 2021 with a new tenacity that says “we made it through 2020, so we can make it through anything!!!” Merry Christmas, Happy New Year, and God Bless.
