The U.S. economy has had more twists and turns than Colorado's Million Dollar Highway over the past year, but the demand for qualified truck drivers and flatbed shipping carriers is looking strong heading into the second quarter of 2021.
The freight market and transportation industry has been posting promising growth since late 2020, and economists and transportation analysts alike have been closely tracking the resurgence in flatbed shipping. So far, only the chaos brought by February's winter storms was able to interrupt the flatbed sector's upward trajectory. But many of the economic factors fueling the growth of the flatbed trucking industry are still in place—and expected to buoy the positive outlook.
There are several factors contributing to the favorable environment for flatbed freight and the global and regional trucking companies that move it. Chief among these factors is the fact that industrial production and construction remain healthy. When paired with the growing trend that there are more flatbed loads than there are trucks or drivers to haul them, the scales are tipped toward shippers and those in the transportation market for the foreseeable future.
Consequently, many flatbed trucking companies are ramping up driver recruitment efforts by offering competitive pay and benefits, as well as other perks and incentives. However, an ongoing truck driver shortage is making it even harder to nab qualified flatbedders who are up to the task. There just aren't enough companies with enough trucks to meet the surging demands of the global shipping industry. Orders for North American Class 8 trucks were the fourth-highest on record in December 2020 and remained above 40,000 units in January 2021.
So what's the 2021 outlook for flatbed loads and shipping rates? In a word: optimistic. Available data indicates that flatbed trucking companies could enjoy a much stronger and more stable year following the turmoil of 2020. Here are four encouraging signs the industry is keeping a close eye on.
Between January 2020 and January 2021, the flatbed load-to-truck ratio has exploded 180%. The ratio was sitting at 48 in January 2021, meaning there were 48 loads available for each flatbed truck. In other words, there's plenty of freight to go around. Flatbed carriers with sizable fleets and plenty of experienced drivers are in the perfect position to ride the wave of demand for as long as it lasts.
Flatbed trucking spot rates are also on the rise, up nearly 15% in a year-over-year comparison. Spot rates offer a snapshot of the per-mile cost to ship a certain type of freight. In late February, flatbed spot rates even surpassed van rates, with the average hitting $3.01 in the Midwest.
Analysts have also noted that there's been less volatility in the flatbed market as of late, with load-to-truck ratios and spot rates showing a steady increase over an extended period. That stability is a welcome change for flatbed trucking companies after the ups and downs of 2020!
The construction and manufacturing industries are off to a good start in 2021, which bodes well for the growth of flatbed loads in the near term. There's some evidence that suggests that this growth might be sustainable for much of the year, with particularly lofty expectations for the third quarter.
New construction homes and building permits for single-family homes in particular—which are viewed as a leading indicator of flatbed demand—were up 4% from January to February and 30% year over year. That steady growth in housing starts is feeding the flatbed frenzy, with load posts in the top 10 markets jumping 5% week over week in late February, according to DAT.
The manufacturing sector is also showing heartening numbers at the outset of 2021. While the industry has been slow to recover in the wake of the coronavirus pandemic, a positive trend taking shape in recent months remains intact. Five of the six largest manufacturing industries saw moderate to strong growth in January, according to the Institute for Supply Management's manufacturing index.
There's another factor playing into the tight capacity gripping the trucking and shipping industry—a severe truck driver shortage. Even before COVID-19 struck in early 2020, trucking companies were struggling to recruit, hire and retain enough qualified drivers. The pandemic's initial impact only made matters worse.
By the end of 2020, the trucker shortage had skyrocketed to 80,000, notching a staggering 30% year-over-year increase. The American Trucking Associations has projected the shortage could hit 100,000 by 2023.
Throughout the pandemic, CDL driving schools have been operating at limited capacity and graduating fewer drivers. The CDL Drug & Alcohol Clearinghouse was also rolled out in 2020 and removed 40,000 drivers from the hiring pool due to failed drug test results.
In light of all the doom and gloom on the hiring front, however, experienced flatbed drivers are...well...in the driver's seat. Regional flatbed companies are growing, and there's an excess of company driver positions. This competitive environment is leading to higher pay. Now's the time to act for skilled drivers thinking about getting back into the flatbed game!
U.S. imports are another factor contributing to increasing flatbed demand. Imports have been steadily climbing since late 2020 and hit an annual high in December, with nearly $257 billion in goods flowing in from other countries.
Industrial supplies and materials in the freight market, along with automotive vehicles, parts and engines saw month-over-month increases from November to December, translating to a combined $5 billion increase. That's tons and tons of flatbed freight that needs to be transported safely and efficiently to destinations all over the country.
China, in particular, continues to be the leading supplier of imported goods. In just a year's time, China's exports to the U.S. have jumped 65%. Boatloads of larger goods like furniture, kitchen appliances and building materials are arriving stateside as consumers focus more on updating their homes during the pandemic. That's a good sign for flatbed trucking companies and ambitious drivers looking to earn more.
At JLE , drivers are averaging about $75,000 annually, and the top 25% are earning upwards of $95,000 a year. In the Lease Purchase program, those numbers climb to $100,000 on average and top 25% are making $165,000 after all expenses. If you're ready to achieve your trucking goals with a company that values your hard work, start our online application process today and learn more about our driver-focused culture.