Shippers around the globe continue to express concerns for the state of the freight economy 2020 industry. Experts disagree on whether we are heading for a recession or a boom. The reality is simple; organizations that can roll with the changes and adapt supply chain processes will evolve and experience productive years. Unfortunately, those that do not recognize the need to evolve will face vast uncertainty, experience problems with risk management, realize higher transportation spend and succumb to a perception of recession. To maintain objectivity, let’s take a closer look at whether the freight economy 2020 will go boom or bust.
Fears over whether the freight economy 2020 will slip stem from the expectations and events occurring within the trucking market. Weaker freight demand, the pressure to maintain profitability, higher-price diesel, and falling truck and trailer production mixes elude to uncertainty. Meanwhile, the US-China Trade War appears to be approaching stabilization reports Transport Topics, and overall shipping volume is still in correction territory. Of course, it helps to understand the key indicators of a freight recession and why they appear.
According to MarketWatch, the U.S. Bank Freight Payment Index found that total volume and spending on freight transportation fell in the fourth quarter of 2019. However, spending in 2019 was still up 3.9% year over year, so light rests at the end of the tunnel. The freight economy impacts diesel prices and vice versa. While the freight economy might not yet be on the brink of collapse, shippers need to realize that the changes within the industry will have a direct effect on operations, including:
Shippers that hope to avoid the risks of a recession in 2020 should follow a few best practices:
There’s really no telling if the industry will go boom or bust in 2020. One thing is clear; the industry is on a precipice, and shippers need to realize that deployment of data, technology, and innovation will combat the effects of the potential freight recession within the freight economy 2020 cycle. It’s an oddity. Recession fears remain, and shippers can avoid the topic entirely by simply staying proactive in freight management.
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