Many industries were affected by the global pandemic of 2020, and the major changes are still being felt in the trucking industry today. If you own or operate a freight company or any other business involved in the movement of goods, it’s important to be aware of the trends you can expect for 2021. For those operating or requiring the services of freight companies in Minnesota, here’s what you need to know about what’s driving the demand for freight in 2021.
Increased economic demand
The overall economy is what drives demand for freight companies in Minnesota and all over America. As the economy continues to rebound after the major changes seen in 2020 due to the global pandemic, expect an increase in Gross Domestic Product (GDP) growth, industrial production and retail spending and consumption. Due to the booming economy, the need to restock inventory is one of the key factors driving demand for freight.
Diminished truck capacity
It’s often said that total freight drivers available is the most important variable determining market capacity. The global pandemic also impacted the number of freight drivers that are out on the road. By some estimates, there are nearly 200,000 fewer drivers transporting freight from 2020 to 2021. Expect this number to rebound slightly as the impact of the pandemic starts to decrease due to efficient vaccine rollout.
Throughout the entirety of the pandemic, retail stores have been dealing with major supply chain issues that affect their inventory in unpredictable ways. Companies are working to make their supply chains more resilient in case of similar unexpected situations, and the movement of freight is key to keeping consistent inventory to meet up with unpredictable demand. The past year was a unique year where businesses were unable to rely on the typical inventory-to-sales ratio. While demand has been moving rapidly downward during the pandemic for certain goods like beauty products and apparel, demand for other goods like lumber, metal and other building supplies has soared.
The price of construction materials has risen so much during the pandemic due to the laws of supply and demand. The construction industry continues to thrive throughout 2021, presenting lots of opportunity for freight operators. There’s also a backlog of projects due to pauses brought about by the pandemic. Expect demand for the movement of construction materials—including lumber, metals and more—to have an impact on the price of freight service throughout 2021 and beyond.
Whether you own or operate a freight company in Minnesota or you require the services of one, it’s important to understand how a variety of economic conditions will affect the cost of services throughout 2021 and beyond. While the economy is showing signs of recovery and supply chain issues are evening out after a wild 2020, the demand for freight shows no signs of slowing down. Contact the team at K-Way Express, Inc. today to learn more about reasonable rates for freight and how we can help your business get its goods where they need to go.