Three key trends we saw this year, and one to keep an eye on in 2022
We’re closing in on the end of another year. Our industry faced many novel challenges and changes this year, revealing new opportunities and paths forward. As we exit 2021, let’s look back at three key industry trends we saw in 2021, and one key item to look forward to in 2022.
Trend one: different buying patterns
The lockdown economy, beginning in 2020, drove significant increases in online shopping with merchants raking in $861 billion in e-commerce sales, a 44% increase in 2020 over 2019. As vaccines roll out, our world begins to reopen, and Americans revive spending on travel, dining and experiences, it’s still expected we’ll see a drop in online purchases. But how the habits of 2020 and 2021 will continue or evolve is yet to be determined.
Trend two: the impacts of government spending on trucking
Broad spending initiatives like the new infrastructure bill could spark economic activity while further exacerbating driver supply issues. Areas where the dollars are allocated would likely drive demand for shipping beyond near record levels we’ve been experiencing. Job implications could be impactful for freight – unprecedented construction hiring for public works projects would further shrink the driver pool. Which leads us to the third item…
Trend three: the driver shortage continues
Additional stimulus checks and unemployment benefits continue to keep drivers off the road. Even as various state governments have rescinded pandemic unemployment benefits, there are still more than millions of workers with continuing pandemic claims. With that much labor sitting on the sidelines, we’re unlikely to see any quick relief for the driver shortage. Carriers have introduced new perks and incentives, yet according to the American Trucking Associations, fleet sizes for large and small carriers remain down. Additionally, many company drivers are electing to run under their own authority, not necessarily increasing capacity, but resulting in reduced utilization and deeper fragmentation of the industry.
What we’re watching in 2022
If inflation begins to take root and interest rates rise, without wage growth, consumer purchasing power will be diminished in real terms. So, can consumer purchasing power and sentiment remain strong over the course of another one or two quarters? Or, put another way, can it remain strong over long enough of a duration for the services sector to recover, which in turn will allow a stressed supply chain to make some welcome progress in unloading containers and replenishing inventories? The holiday shopping season will tell us a lot about the resilience of not only the American consumer but also the continued durability of our country’s supply chains. Metrics around services consumption such as holiday travel, concert tickets, and dining out will also clarify a good bit of what the near future holds.